SMB & ETA Acquisition Lender | Author | Closed $560 Million in 10+yrs| SBA loans from $2.5 - $10.0 million | tweeting real SBA stories | War Story Saturday šŖ
- Tweets 7,031
- Following 302
- Followers 38,049
- Likes 5,340
WSS: Bruce, I am under LOI to buy a business for $10,000,000. Is this too large for me to consider SBA Financing?
Also, I only have $40,000 of my own to invest. Is that to little?
I would love to see what my options are here and want to know if you can help
Well, let's see š
48
31
609
380,511
WSS: Bruce, I have executed an LOI to purchase a business for $6,400,000
I believe Iām the right buyer BUT my personal net worth is less than $100,000
Can I get an SBA loan to acquire this business?
So, what do you think ?
42
54
525
280,102
Maybe Iām getting too sensitive in my old age.
How about at least a call to say āThank Youā after we close your $5,000,000 loan
Am I expecting too much š³
87
5
431
WSS: Bruce, I would like to buy this $3,000,000 business, but I do not want to bring in any investors.
I have about $100,000 of my own. Can I acquire this business without any minority owners?
Will the SBA provide that much leverage?
Well let's see š
23
21
416
209,942
Bruce, I want to buy this business
Itās throwing off $600,000 in SDE
Can you provide the financing for this transaction?
Well, Twitter world, do you think this will pencil out ?
42
38
397
255,028
WSS: Bruce, I want to purchase this business for $4,000,000
I only have $75,000 in total liquidity. As a result, I will be bringing in several "Minority Owners" and raising equity
What do I need from them?
What information do they need to provide?
well read here and find out
18
42
350
121,642
Buyer pays $5,500,000 for this light manufacturing business financed with a $4,550,000 SBA Loan
And then requests and gets another $5,000,000 SBA loan on the same business
How did he do that?
š§µ
12
29
344
WSS: Iām thrilled to post that yesterday we closed a $5,8000,000 acquisition transaction for a Searcher who first reached out to me on X in 2023.
Here's how this family man took $50,000, and his vision, to make his deal work. š
22
6
332
129,238
WSS: Bruce, I am looking to acquire this business for $3,700,000
I heard I might be able to do so without putting any money into the deal
Is that true?
YES !
Really:
30
23
324
128,059
WSS: I just signed an LOI for $7,000,000 for a great company in a great industry
I have very little money of my own but have investors that will back me
I am under 30 but believe that I am the right operator and want to know if you will lend me the money to buy this business?
32
27
319
200,341
We closed a $2,245,000 acquisition transaction:
And shortly thereafter, the unimaginable happened:
š§µš„²
54
31
296
WSS: I am searching for a business to buy and operate
Given I have about $35,000 to invest, what size business can I buy?
I understand the SBA requires 10% down so does that limit me to a very small business?
One that is selling for $350,000 or less?
Can you say Search fund?
32
24
289
143,277
So you get an SBA loan for $5,000,000 to buy a business
What does that look like now 5 years later
What, the business is now worth $50,000,000
Read here to find out how:
š§µ
11
24
244
WSS: Bruce, I need your help in structuring this acquisition transaction.
I would like to submit an LOI for $2,250,000
I want to also own 100% and do not want to bring in outside investors and dilute my ownership
But, I don't have much liquid cash to invest
Any ideas?
25
19
242
197,061
I received some awesome birthday presents this year, including this shirt. My family even knows my saying!!
16
4
199
WSS: Bruce, I am currently under LOI to buy a business that did $535,000 in EBITDA in 2022 and $978,000 in 2023.
How does your bank look at this? Can we model this deal to see if it pencils?
What should I be looking for?
Well, read here š
14
11
210
162,938
WSS: Bruce I want to buy this $2,500,000 business
I want to discuss āworking capitalā with you
Are you ābuyingā the working capital needed?
Are you financing the working capital needed?
Do you know how much you need?
Ok, Letās discuss here
(***IMPORTANT THREAD***)
16
17
201
99,266
NEW WSS: Bruce, I have executed an LOI for $3,200,000 to acquire this company.
I really want to buy this as it checks all my boxes.
Buy it?
Based on the cash flow, it looks more like you're "stealing it"
How the heck did you find such a deal?
They're out there, obviously!
14
13
189
132,181
So, hereās how a searcher took $60,000 of his own money and turned it into almost $4,000,000 in 3 years. #SMB #Search #acquisitions
5
14
173
WSS: Bruce, Iām looking to acquire 88% of an existing business. The Seller would like to roll 12% equity.
Itās a very large deal. We heard this can now be done with SBA financing
Is that true? Have you done it before?
Does it have to be a stock sale?
Well, keep reading š
11
10
173
93,809
New WSS: My partner and I submitted an IOI on a business we had interest in buying.
As a result, our broker and selling broker set up a meeting with the seller.
It was our chance to "walk the business" and meet with the seller in person.
Curious how it went?
Well read here!
13
10
164
98,081
WSS: Ā This week, several discrepancies occurred with a $3,500,000 transaction that almost derailed the deal.
The information I am going to share, I believe, will be very valuable to those looking to acquire a business.
Financial due diligence of course is key!
So here goes š
7
8
167
85,436
WSS: Bruce, I have executed an LOI for $4,000,000 to purchase this business which does include the purchase of real estate as well.
Given that the purchase price includes real estate, how does this change the deal, the amortization schedule, rate, terms and conditions?
Well š¤
15
17
161
95,589
I received confirmation yesterday that multiples are coming down. Most business valuators are looking at around 3-4X and then adding or subtracting from there.
When I am looking at my DCF model to value, Iām using 19% as a Discount Rate
Opinions/thoughts?
37
3
153
86,680
WSS: Bruce, I want to meet with you before we close our $4,250,000 loan that your bank approved
I know you owned a management consulting firm for 13 years.
I want to get your advice on a problem that I can foresee happening
Oh no, what problem?
11
24
153
122,031
WSS: Here's how to turn $30,000 to over $3,250,000 in 10 years. This is from a deal we recently closed.
As a result, I wanted to share with those just how much wealth can be created my purchasing a successful small business.
Obviously, this is why "search" is so popular!
7
18
148
119,887
WSS: Bruce, I want to submit an LOI for $5,000,000 on this business
Can I review this deal with you to see if this is something your bank might finance?
Of course you can.
BUT, tell me what you are basing this on and...
9
13
143
130,052
2 Managers with very little capital, purchased this $3,200,00 business after trying to do so for a year and a half.
Hereās how:
š§µ
18
20
139
WSS: Bruce, I have an executed LOI for $4,250,000 and wish to work with you to help get this done for me.
Task accomplished, deal approved, commitment letter signed!
Now, read why this deal didn't close and valuable lessons learned š
14
8
141
96,695
A Broker brought this deal to market at the listing price of $5,995,000
A prospective borrower submitted his LOI, so the broker referred him my way
Believe me, you will not want to make this same mistake š®
š§µ
13
10
139
There is a reason this space is imploding. Deal flow is super strong and I feel privileged to be part of the journey.
I hope this post has provided some value to you. If so, please like, share and re-post.
@sbabmarks
15
5
136
14,208
So Bruce, can you help me, no, because the noose is to tight around your neck.
But keep looking or re-trade the deal to make it work!
Hopefully this example helps clarify things for you and adds real value. If it does, please like, share and retweet. @sbabmarks
14
2
131
8,939
So 2024 is in the books. This past year I had $104,000,000 in Search Fund Acquisitions approved. Mostly for folks on this platform.
We closed $82,400,000 of that!
That means 20% blew up in closing.
I shared a tread about why a few months back
16
4
131
25,754
WSS: Bruce, I'm a searcher looking to buy a business. I don't have that much in the form of assets and I don't have much capital to invest
I heard I may not be able to get SBA financing as a result because my PFS is weak
Is that true?
Here's the 5 most asked questions I get
10
12
123
71,077
I want to submit an LOI on a business in Colorado
The deal does pencil out and my model works
It is throwing off $650,000 in SDE
Can you finance this acquisition for me?
No, NEVER š³
WSS:
12
6
123
90,034
War Story Saturday (WSS): Bruce, I want to buy this business. Iām willing to pay a 3.5X Multiple.
ā ļø Is that on SDE or EBITDA?
You know thereās a BIG Difference right?
Especially if the Sellerās āOther Benefits" are large.
Really! Can you tell me more:
13
18
118
81,145
WSS: Bruce, I want to submit an LOI for $4,000,000 and would like you to help structure the transaction!
How much equity must I personally inject?
How much total equity do I need to bring to the table?
Can the Seller Note act as equity?
How much collateral do I need?
Let's see
8
10
123
50,558
WSS: We closed a $2,245,000 acquisition transaction:
And shortly thereafter the unimaginable happened š§µšŖ
(warning - very sad story)
I made a conscious decision this week to repost a thread from a year ago.
25
15
123
213,549
WSS: Bruce, I am under LOI to purchase a business for $5,000,000.
I would like to discuss SBA Financing with you.
I have modeled the deal, and it pencils!
Hereās some lessonās I learned and now use.
A Lenderās perspective belowš
3
6
120
37,790
WSS: This week, a transaction for $7,450,000 that was approved and in closing finally died for good.
Those in the Search space know " a deal dies at least 3 times" before it actually closes.
Here's why this deal did not close and lessons to be learned.
14
9
118
91,554
As we wrap up 2024, I want to express my sincere gratitude to this community. In 2024, I had over $100,000,000 in Search Transactions approved and closed just over $82,000,000.
Mostly because of X!
Thank you for allowing me to be part of your journey.
Happy New Year!
6
1
119
8,441
Bruce, can you do this deal? $900,000 in EBITDA and a $5,000,000 purchase price at 80% financing?
When you add your salary, Seller Note repayment, added deal costs and sensitized interest rate.
Today, itās not even close. NO, there simply is not enough FCF.
15
6
115
We closed a $4,000,000 deal for 2 partners
6 months later the loan was defaulting
Why?
For reasons you may not be thinking of:
š§µ
21
10
112
WSS: Bruce, I have built a financial model and want to go over it with you.
This is a business I would like to submit an LOI on that suits my background but there are factors I am concerned about and need your expertise
This was a fantastic dialogue and I want to share it! š
7
10
118
87,587
WSS: Bruce, we are ready to go through your model for a requested Term Sheet. We would like to submit an LOI for $4,000,000
We have most all the information you requested. We are eager to move quickly and have spent 6 weeks digging into all aspects of this target
Surprise š³
10
12
112
71,649
Hereās how a deal went from an LOI to bust from one accounting entry. Upon review of the tax returns submitted there was an entry for $325,000, line 5 on the 1120-S, Other Income.
10
5
110
WSS: Bruce, Iām thrilled. My LOI has been accepted at the purchase price of $4,500,000.
Iāve been searching for a while, and Iām eager to get started with you immediately.
Can you help me get this transaction done?
What did you say the EBITDA was š³
5
6
116
66,762
I know you want to submit an LOI.
You know I preach about working capital being included
So, I thought I would share some general thoughts around that subject.
So, please ask/consider this:
7
11
114
73,888
A Searcher from here on Twitter just lost a large transaction during Due Diligence
I wanted to share this story and provide some real insight
If you are serious about acquiring an SMB in 2023
This is one WSS you donāt want to skip!
š§µ
16
10
109
83,806
WSS: A large deal (over $5MM) blew apart this week although we issued a commitment letter.
This is painful for a Searcher.
I thought I would share what he lost going through this process in hopes it does not happen to you.
Continue reading hereš
15
3
113
72,318
I normally donāt talk about me, I just try to add value for those that follow.
I made the Wall Street Journal today, so just a little proud!
23
103
11,480
I have a signed LOI for $4,500,000 but hereās the rub
The business being sold has very few clients and 4 of them make up 80% of the revenue
Talk about āconcentration riskā
Can I still get financing?
Well read here to find out:
š§µ
16
11
108
I am so pleased to share that in 2022, my team approved 22 loans this year totaling almost $90,000,000
Not all deals closed as you know because War Story Saturday shared these with you.
I report this to you all because it shows and supports our commitment to the SMB community
18
2
106
31,987
WSS: Bruce, I already have an existing SBA loan for $4,000,000.
I have found another business I would like to purchase.
I heard that the SBA now allows a borrower to have multiple loans.
Is that true? Can you help?
Well, letās discussš
10
6
109
46,163
WSS: This past week, unfortunately another transaction for $7,500,000 fell apart after issuing a commitment letter.
One can say "this is just part of the business"
Although that is true, it still stings for all those involved
so let's discuss here š
4
5
108
62,013
So this is me, just being real. I hope you can take 2 minutes to read this.
First and foremost, those thank you messages from me to you thanking you for your follow are not automated (I donāt even know how to do that)
I actually look at your profile!
5
105
27,164
Bruce, I be am willing to inject $150,000 more in equity!
Does that make you feel more comfortable as a Lender
Actually less comfortable š³
Are you serious ??
13
2
104
55,424
WSS: Bruce, I want to submit an LOI
Ok, so you have done a deep dive on the company, have their last 3 years tax returns and of course at least 12 months of financial statements so you can see what the working capital needs of the business are, correct?
Well š
10
8
105
69,532
WSS: Bruce, we have an executed LOI for $7,500,000.
We want to inject only 5% in equity towards the purchase price.
We are requesting a large Pari Passu loan and need to close within 30 days.
Can you and the bank do this?
As a Searcher, Iām sure this sounds familiar! š
7
4
103
38,206
WSS: Bruce, I have signed an LOI to acquire a business for $3,200,000.
I live in the Midwest and the business is located in the Southeast.
I donāt plan to move permanently, but will be there several days a month.
Will this create a concern for you and your bank?
6
10
103
105,698
As always, I hope you have found value in this tweet thread and if so, please like, share, and retweet, so others may find value as well.
Making an impact and getting your deal to the closing table is what itās all about.
@sbabmarks
13
2
94
10,790
We closed a large SBA loan for a very prominent Searcher here on Twitter today.
Iām very excited for this person and Iām flattered that they choose me to do their deal.
3 more that will close this month as well! This platform is like none other!
Impactful lending for sure š
11
4
96
23,677
My wife and I went to Capial Grille last night to celebrate our 41st wedding anniversary.
We had reservations as did every one else.
The place was 100% packed, not a table to be had.
Howās the economy doing??
33
91
Bruce, I have a signed LOI for $3,500,000 to acquire the business that I am currently managing
The financials are in a complete disarray however and Iām not sure they will show Debt Service Coverage
What can I do to get this deal to the closing table?
Read here/WSS:
8
6
90
58,046
WSS: Bruce, I have an executed LOI to purchase a small manufacturing business for $3,385,000
I want to use some money from my 401(k) plan to fund the equity injection or 10% required.
I heard that one can do this, correct?
Yes, but there are some important factors to consider!
7
11
89
74,609
WSS: Bruce, Iām under LOI to purchase a great company for $6,500,000
I plan to inject $100,000 of my own money and raise most of the equity required.
Itās in an industry you may or may not like, but I would love to tell you more!
Can you help get this deal done?
Let's see š
4
2
93
37,855
Two managers came together to buy this $6,500,000 business they were essentially operating.
We worked together for almost 14 months!
Not only was our strategy to buy the business successful, but the buyers saved literally $250,000 off the purchase price.
Curious how š¤
š§µ
7
9
92
WSS: The first Letter in SBA stands for Small. When I made my very first SBA Loan years ago, the maximum loan amount was $500,000. Today it is $5,000,000.
When I look at my 3 most recent transactions, the purchase price of each has exceeded $12,000,000.
Are these small?
12
2
86
36,388
WSS: Bruce, Iām interested in buying this business for $3,500,000
Sales were 30% higher in 2022 vs. 2021
How does a lender look at this?
Can I get SBA Financing for a high growth company?
Here's what you need to know:
8
8
90
58,373
WSS: I have an executed LOI for $2,500,000. I am speaking with a few Lenders BUT have several requirements to get this deal over the goal line.
These are:
I want to invest only 2.5%
I need to close in 60 days
Working capital will exceed my equity injection
Interested ?
6
7
90
49,871
WSS: I would like to submit an LOI for this business. Before doing so, I wanted to make sure the deal pencils so I don't hear "Congratulations, you have structured a deal that doesn't work"
This deals pretty much checks all my boxes
The purchase price is $1,700,000
Let's see
6
10
86
65,269
The point of this week's WSS is (and has been) is don't let the equity alone stop you. If needed, bring in investors. If not, be creative and work with your Lender to figure out a strategy that works for you
Please like and share if you found value in this thread
@sbabmarks
9
83
5,687
NEWSFLASH ā¦
Paying a 5X Multiple with a 10% equity check and a 10% Seller Note and requesting an 80% SBA loan today, is not going to pencil out!
AND, please donāt tell me you are willing to take a salary of $50,000 to do so.
SMBTwitter world, please!
14
3
88
34,633
We are closing our largest ever Pari Passu Transaction this morning.
Who would have thought that a deal over $12,000,000 was possible with SBA Financing
So thrilled for my Searcher. I guess I will call and say thank you for choosing me š
22
1
84
21,979
I share this story because itās real and wealth has certainly been created.
As I have mentioned in prior tweets, itās about lending to good people, buying good businesses with good strong cash flow. As I like to say, the 3 Gās of a Good Deal!
@sbabmarks
11
1
84
We issued a Commitment Letter 3 weeks ago for $6,100,000 and the borrower called 3 days ago to tell me the deals off
Are you kidding me, not again!
If you are a Searcher/Buyer, you will want to spot this red flag quick:
š§µ
12
7
82
WSS: Bruce, I have already worked out the terms and conditions on this $4,200,000 acquisition of a Web Design and SEO Agency
One of the conditions is a 3-year Non Compete Clause
I'm fine with this, but wanted to make sure the Bank was as well
What say you SMBTwitter ?
12
8
81
115,308
This is what I observed this week sitting with about 25 Searchers:
* the PG on an SBA loan is scary
* the PG will actually kill dreams
* some are ok with a PG on a small scale
* if one does have assets to protect, what are the strategies to do so
12
4
82
109,137
WSS: So, having spent the last three days with about 25 searchers and listening to all kinds of stories about acquiring, and then operating a business, I thought I would share some highlights.
1. Be flexible in your search. Dive deep. Obstacles can be overcome.
6
3
80
31,232
WSS: Bruce, I want to talk with you about several issues I am facing as a Searcher.
When dealing with Brokers, I am getting pushback
They want me to sign an NDA and complete personal financial information
What are they actually looking for? Can you help?
**Important Read**
3
6
80
45,147
WSS: A few weeks back, the largest transaction I have personally worked on, a $13,000,000 purchase price, fell apart AFTER the loan request was approved and the deal was in the closing process.
After speaking with the client this week, I thought I would share the pain.
8
7
77
65,316
I just had a great call with a client. We closed his $5,000,000 deal last year
He called to let me know how fantastic things are going and how he and his wife have grown the business.
I asked him if he could share with me a little about the transition.
Hereās what he said:
4
2
80
42,571
I am posting this at the urging of @SMB_Attorney and @SBA_Matthias
I have had 11 acquisition transactions approved in the last two months for over $60,000,000 for Searchers.
They both said the āSMB Communityā will want to know!
8
3
76
29,933
WSS: after spending three days with approximately 20 acquisition entrepreneurs, here are ten takeaways.
These will be useful tips for you if you are searching, looking to acquire a business and seeking SBA Financing.
So here goes š
4
4
77
21,836
Just as a reminder, or in case you somehow missed this:
1. A seller may not roll any equity in an SBA loan. The acquisition must be for 100% of the small business concern.
2. A seller can stay on for no more than 12 months after the acquisition as a consultant.
These are SBA specific rules and not ābank rulesā
8
4
78
37,015
WSS: Bruce, I have executed an LOI for $4,150,000. I want to see if you can get this deal to the closing table.
I am basing the purchase price on TTM of $1,000,000
(Trailing Twelve Months)
Is this going to be a problem?
IT MIGHT VERY WELL BE š³
And here's why!!
4
3
77
41,994
WSS: Bruce, Can we talk about the elements of an LOI and some of the language that is included?
I want to better understand exactly what needs to be in there so it is a meaningful LOI.
Can you provide a draft for me as well?
Ok, letās dive in š¤æ
6
9
76
44,441
Welcome to the āSearchfund Modelā. I informed him the SBA is a ācash flow lenderā and the transaction checked all the boxes.
We had the 3 Gās well covered. Lending to Good people, buying a Good business with Good strong cash flow!
So we proceeded forward.
1
3
73
14,984
I just emailed a $4,300,000 commitment letter to a Searcher who contact me 11 days ago.
We went from Term Sheet to approval that quickly.
Speed and certainty to close was what he asked for and what we delivered!
Yes, it matters who is your SBA Lender!
6
1
76
11,278
WSS: Bruce, I have received your banks commitment letter for my $4,100,000 acquisition transaction.
Can you set the expectations around timing and what is needed to get this deal to the closing table?
Of course!
Here's what you need to know about closing an SBA Loan:
5
7
77
62,243
WSS: A few months back, I met with a gentleman who wanted to purchase a small business. It truly defined the word "small".
He explained that the business would not qualify for an type of financing as the Seller's Tax Returns showed very little profit
What now?
4
6
74
34,137
I have only been on Twitter for 3 months.
And I may only have 1,400 followers but I canāt believe the amount of business this platform has generated.
I already have my first deal in closing on a $3,750,000 acquisition for a Searcher who reached out to me from this platform
6
3
75
Bruce, I was referred by a friend who you helped 4 years ago get a loan. Itās a really good transaction, but not sure it can actually get done.
Why do you say that?
Because several lenders have already passed on this $7,000,000 deal.
Well, letās see if I can change that !
8
6
72
39,824
Buying a SMB
Do I need a business plan and projections?
If you are using an SBA loan to finance it:
12
6
77
Bruce, I want to book some time to chat with you about an acquisition I am considering for $2,200,000
I am going to send you the CIM in advance
I'm looking forward to hearing how you will look at this deal and if you can get it done
Interesting WSS on the deals I see
š§µ
6
6
74
44,923
