Thread by @SBA_Matthias

Tomorrow an SMB entrepreneur will close on a business acquisition with 80% bank financing for a ~$3.1 million enterprise value business.

In this thread, I will share some highlights of the story. 1/x

#sba #smb #acquisitions #entrepreneurs

On August 10th, @PIONEERCAPADV received a cold call from the searcher

"Hi this is [searcher's name]. I came across you on Searchfunder wanted to learn more about your process, etc"

Introductory discovery call takes place. Searcher gives high level overview of target co. 2/x

On September 11th, the searcher executes an engagement letter with @PIONEERCAPADV for PCA to source the financing for the business acquisition. 3/x

@PIONEERCAPADV starts lender engagement for the client, procuring 2 term sheets from different top 20 SBA lenders. Multiple lenders engaged to run a competitive process for the client. 4/x

Now this is where I will dive into some details.

The company being acquired is one in major growth mode. Below are DSCR figures for the last 3 years. 5/x

Some of the lenders that reviewed the file initially decided to pass due to DSCR only being strong for 2021 and the 2022 YTD period. 6/x

Within 8 days following engagement of @PIONEERCAPADV, 2 term sheets were received from top 20 SBA lenders, one at Prime + 2.50% (no SBA Express LOC), the second at Prime + 2.25% with a $125K Express LOC. 7/x

Now this is where things get interesting & why @PIONEERCAPADV works with lenders that are experienced in the SMB acquisition space. Of the required $330K down payment for the acquisition, only $45K is coming from the searcher. 8/x

Many banks want to see a good portion of the down payment come from the searcher to see meaningful "skin in the game," but the bank that approved the deal did not have this requirement. 9/x

On 9/19, the searcher signs the term sheet to go into underwriting for the deal. 10/x

On 10/3, the bank working on the deal issues the commitment letter to the searcher. From the start of underwriting to the approval, there were no last minute surprises from the bank. One of the smoothest underwriting processes I've been a part of. 11/x

Tomorrow at 9 am CST, the searcher will close on his acquisition and will join the next generation of American entrepreneurs 🗽 🦅 12/x

Big shout-out to all involved that made this go seamlessly @sbabmarks @SMB_Attorney @smblawgroup @saoliver1051 13/x

If you're an SMB searcher looking to acquire a business & are in the early, middle, or late stages of the process, @PIONEERCAPADV would love to connect with you 👇 14/14

calendly.com/pioneercapital…