What Happens to PPP Loan When Selling a Business

What Happens to PPP Loan When Selling a Business

The Small Business Administration (SBA) issued a Procedural Notice on October 2, 2020 which offers business owners and lenders guidance on how Paycheck Protection Program (PPP) Loans are to be handled when a business has a change in ownership.

This post summarizes the notice and includes an Infographic to assist business owners.  It includes the following topic:

When does a Business Sale Require the SBA’s Approval
Does a Business Sale Require the PPP Lender’s Approval or Notification
Required Steps Pre and Post-Closing for PPP Borrowers 
SBA Timeframe to Approve a Sale or Merger when a PPP Loan Transfers
Does the EIDL Grant Impose Additional Steps When Selling a Business

ESOP as an Alternative Exit Strategy

ESOP as an Alternative Exit Strategy

When thinking about ways to sell your business, you are likely familiar with the most common strategies proposed by business advisors: selling to a third-party such as a private equity firm or a competitor, or selling to your family. What your business transition advisor may not have discussed with you is instead selling your business to an Employee Stock Ownership Plan (an “ESOP”).

Tips for Expediting the Sale of Your Small Business

Tips for Expediting the Sale of Your Small Business

As a business broker serving business owners who want to explore their options for exit, I get this question at almost every listing appointment:
“How long will it take to sell my business?”

The research indicates the answer is as follows:
For businesses that sell for under two million dollars, the IBBA’s research indicates it’s going to take 7-9 months…
Essentially you could have a baby in the time it takes to sell a business.
Many owners aren’t excited about this answer, but there are a few things you can do to expedite the sale of your small business. Let’s explore how to sell a business quickly.

Won’t My Business’s Assets Increase the Value of my Business?

Won’t My Business’s Assets Increase the Value of my Business?

As a business intermediary helping owners determine the “Most Probable Sales Price,” or MPSP of their businesses here in the Triangle, I hear a common question:
“That value makes sense, but what about all my stuff? Can I get paid for that too?”
The answer is rarely what the business owner wants to hear, but there’s a sound reason for it, and understanding how businesses are priced can help an owner with decisions on how to allocate resources for assets; especially if they are planning to sell in the near future.
In this article, we’ll explore the market approach for small businesses and what value the assets carry…

When to Hire a Business Advisor

When to Hire a Business Advisor

Doing deals can be expensive. A lot of entrepreneurs want to save money by not hiring an advisor or they don’t know when they should make the investment on an advisor. It’s important to understand the roles of the broker and other advisors, especially legal counsel, and to know when to bring in a professional. Here are some milestones in a deal, and how to know when to hire a business advisor.

How to Overcome Customer Concentration Objection When Selling a Business

How to Overcome Customer Concentration Objection When Selling a Business

One of the greatest risks any buyer faces is what will happen to the business’ best customers post-sale. Will the top customers celebrate the founder’s great accomplishment or maybe decide it’s a good opportunity to negotiate better pricing or payment terms with the new owner? Or worse yet, will they be spooked by the new owners and find an alternative vendor?

Astute buyers measure this risk quickly. Typically, one of the first questions experienced buyers ask the business broker is about the presence or lack of a customer concentration.

For the business owner considering the sale of his business in the near future, having a clear understanding if a customer concentration exists is vitally important. In fact, the lack of a customer concentration is a great selling point.

What is the Value of My Business and How to Improve It?

What is the Value of My Business and How to Improve It?

Depending on the circumstances and objective of the owner, the value of a business can vary considerably. For instance, upon sale to unrelated party, an owner would expect to receive the maximum purchase price for their business the unrelated party is willing to pay. However, that same sale to a family member or employee may need to be structured so the cash flow of the business can support the purchase price.

For a closely held business, owners generally have little idea about the value of their business, or whether their business is generating an adequate return on investment, and what drives its value.

Can I Sell My Business For Less Than I Owe the Bank?

Can I Sell My Business For Less Than I Owe the Bank?

For many businesses, the ultimate goal is to sell the business. Can you picture it? Walk away from the daily stress and aggravation with a fat pile of cash. Hop a plane to your favorite tropical destination and spend the rest of your days lounging a white sandy beach, sipping pina coladas out of a coconut, without a care in the world.

Well, friends, the above scenario is the ideal scenario. I like sipping cold drinks on a beach as much as the next guy, and I hope that happens for you. But if you clicked on this article, you may be looking at a much different scenario.

And that’s what this article is going to cover: the less-than-ideal scenario.

Surviving Due Diligence & Contract Negotiation

Surviving Due Diligence & Contract Negotiation

You have endured multiple meetings with potential buyers. You’ve written dozens of emails and suffered through several rounds of negotiations to secure the best price and deal structure. At last you have decided on the offer to accept. That’s the worst of it over then? Think again – you have yet to experience the joys of due diligence and sale contract negotiation.

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