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Aug 7 • 6 tweets • 3 min read
These are some great threads about how to buy a business with an SBA loan that I've seen on Twitter over the last several months.

#sba #smb #acquisitions #entrepreneurs
1/x: Sieva Kozinsky's thread below 👇

2/x: Chris Munn's thread breaking down the steps:

3/x: A thread that I wrote 🙂👇

4/x: The playback is out there folks. If you're considering leaving the corporate world to buy an SMB, I would love to connect with you to help make it happen.
@chrisxmunn @SievaKozinsky - thanks for putting out this great content for your followers and the rest of the SMB community. 🔥

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More from @SBA_Matthias

Matthias Smith - Fueling Entrepreneurs Dreams Profile picture
Aug 8
One of the unknowns that is involved in the SBA lending process is what actually happens after a loan is approved and before closing.

For all intensive purposes, if you haven't been through the process before, it is a "black box." The great unknown. In this thread, I'll cover it
1/x: Your SBA loan has been approved ➡️ Congrats, yours almost to the finish line!

Now here is what comes next......
2/x: Business Valuation:

If you are acquiring a business, one of SBA's requirements is having a 3rd party business valuation ordered. While some lenders have this done in underwriting, most have it ordered in closing.
Read 12 tweets
Matthias Smith - Fueling Entrepreneurs Dreams Profile picture
Aug 7
Buying a business is a very difficult undertaking.

There is a reason that few people do it that consider it.

One of the critical items when it comes to the financing process is having a well written business plan. In this thread, I will cover what one looks like.
1/x: As the buyer of a small to medium sized business (SMB), you are the new variable that is getting introduced to the equation when it comes a business acqusition.
2/x: From a lender's perspective, this creates a risk. The seller's business is currently running at status quo. As a buyer, one of 2 outcomes will happen: You improve things, or you end up running the business into the ground.
Read 12 tweets
Matthias Smith - Fueling Entrepreneurs Dreams Profile picture
Aug 7
I always knew I wanted to be an entrepreneur from a young age.
When I was 8 years old, I had the idea of selling bottled water at the Ann Arbor, Michigan summer art fair with a close friend. 1/x
We made hundreds of dollars operating out of a wagon that we pulled around the art fair, but were kicked out after being reported by a vendor, who told on us for operating without a permit. Since I didn't agree with this, we loaded up with more water bottles and kept selling. 2/x
Read 7 tweets
Matthias Smith - Fueling Entrepreneurs Dreams Profile picture
Aug 6
One critical document that is required when you are buying a business that operates out of a leased location is a landlord waiver (also called a landlord agreement). In this thread, I'm going to cover what it is and why it's important.

#sba #smb #acquisitions #entrepreneurs
When a business is financed with an SBA loan, SBA requires that a lender takes a General Business Security Agreement (a "GBSA") on the assets that are being financed with the acquisition. 1/x

#sba #smb #acquisitions #entrepreneurs
The GBSA, which is perfected by the lender with a UCC filing, allows the lender to liquidate the collateral of the borrower in the event that there is a default on the SBA loan. 2/x

#sba #smb #acquisitions #entrepreneurs
Read 11 tweets
Matthias Smith - Fueling Entrepreneurs Dreams Profile picture
Aug 6
It was brought to my attention today that the maximum allowable spread over Prime for SBA loans over $350,000 is 3%. Of course, this is buried deep in a Federal Register post from 6/30/2022 that the average citizen will never read. 1/2

federalregister.gov/documents/2022… Image
I have confirmed with a trusted source on SMB Twitter that does a lot of lending in the 7(a) space that banks are starting to price some loans at Prime + 3%. Prime is currently 5.50%. This means 8.50%. 2/x
As punitive as this is for SBA borrowers, strong deals still have the ability to obtain good pricing. I received a term sheet this week for a business acquisition in the ecommerce space priced at Prime + 1.75%. 3/x
Read 5 tweets
Matthias Smith - Fueling Entrepreneurs Dreams Profile picture
Aug 5
1/x: Buying a business can feel like a monumental undertaking as a searcher.

#sba #smb #acquisitions #entrepreneurs
2/x: First, you have to identify a target company and work through the broker and seller to vet the due diligence materials to ensure it is worth pursuing.

#sba #smb #acquisitions #entrepreneurs
3/x: Then, you submit an LOI and hope that it gets accepted.

#sba #smb #acquisitions #entrepreneurs
Read 11 tweets

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