Bruce Marks, MBA, CM&AA retweeted
One of the most common gaps I saw on the sell side. The fix starts before the CIM: walk the owner through which add-backs a lender and a QoE will actually accept, line by line. Expectations are much easier to reset in month one than at LOI.
Bruce Marks, MBA, CM&AA retweeted
Thanks, Bruce. Realistic expectations on both sides is what gets deals to the closing table. Grateful for the work you do with first-time buyers.
And a BIG thank you for being proactive and doing that @MichaelKeck by doing so you are setting realistic expectations for both the seller and buyer.
Bruce, this one hits home. I've sat in a lot of sellers' offices, and the kindest thing we can do on the sell side is walk through owner comp and rent with them before any buyer does. It's a hard conversation, but it protects their trust and their deal. Thank you for teaching this to the next generation of searchers.
The difference between what the seller believes and the actual EBITDA. This is a deal killer. I explained this to over 90 students this past weekend. Thanks for the example!
A seller had been telling buyers his business generated $1.2 million in EBITDA. He had been saying that number for two years.
When the QoE team went in they found that his compensation was significantly below market rate and that he owned the building personally and charged the business a below-market lease. Neither was fraudulent. Both were real costs a new owner would absorb.
Normalized for both, EBITDA came in at $870,000.
The seller had believed his own number for so long the revision came as a genuine shock. Understanding what your business actually earns under a new owner is the most important question a seller can answer before going to market.
#QualityOfEarnings #MergersAndAcquisitions #BusinessAcquisition #TransactionAdvisory
I am flattered by the number of DM’s I receive asking if I would like to increase my followers by enlisting the help of a ghostwriter and having them create the content. To you, I say thank you!
However, to be authentic and impactful, I will continue to post my own WSS stories
It’s the other 55 minutes where the true value is exchanged. And that is only the beginning of the journey together and so many more conversations. Understanding all the other factors it takes to pull down the deal is when you know you’ve landed the “one”.
I look forward to “what’s next” ! Thank you to all those that have been following, to all the new followers and to all those I have recently met. Being impactful will always be my “why” and I appreciate you choosing me to share your journey.
@sbabmarks
Thank you so much @JackieHirsch_ Feelings are mutual!!
This is how you give back to this community. Yesterday I had the opportunity to be impactful and to provide knowledge to a packed house at WashU, Olin School of Business.
Bruce Marks, MBA, CM&AA retweeted
This week on SMBX:
1. SBA lender navigates $7 million acquisition with obstacles galore…SBA debt, seller financing, licensing hurdles, and more @sbabmarks
2. Profit’s always priority when it comes to sustainable employee pay and benefits @jamesonhaslam
3. How to stress test revenue, margins, collections, customer loss, and debt service before closing @withkumo_
4. Some SMBs need basic, boring improvements before growth can get interesting @SMB_RealEstate
5. A profitable small business isn't necessarily worth what you think when it's time to sell @DBarnettMoncton @robertplank
kumo.substack.com/p/take-fiv…
Wow, that’s a little bit of an increase 🤪
Change of ownership is the largest single segment of 7(a) lending and it has moved way up-market over the last 15 years.
These deals grew 7x from FY2010 to FY2025
For reference...
From ~$1.7B to ~12.4B
Appendix 15 of SOP 50 10 8.1, is a structural response from the SBA to a segment that grew massively, moved up-market, and has specific credit considerations as compared to structures that are not changes of ownership.
For you numbers people...
The dollar figure for change of ownership loans approved from FY2010 to FY2025 is...
$99,500,000,000.00.
There’s just something about writing the digits out instead of using a B that just hits harder.
Thanks for the repost @SMB_Attorney I look forward to doing more deals together 😉
Yes, I’m doing what I do best for my clients while @SAOliver_Atty is busy closing my loans. We make a great team. Thanks for all your support.
