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

Closing Business Deals in the COVID-19 Era

Closing Business Deals in the COVID-19 Era

The COVID 19 Era has begun. In addition to lives lost, there’s an economic toll that has yet to be determined at the time this content is being written.  With small businesses on life support, these are scary times for business owners and for the intermediaries helping owners navigate through them. So how has COVID 19 affected business transactions?

Letter of Intent to Purchase a Business Guide

Letter of Intent to Purchase a Business Guide

If you’re considering the sale of your business, or possibly the acquisition of another competing business, it’s important to understand the selling/buying process.
An often overlooked and important first step during the process of buying or selling a business involves the negotiation of certain terms the buyer and seller will ultimately agree to at the closing table once the due diligence phase of the process is completed.
If either party ignores the importance of the initial terms’ negotiations, they can often end up with a bad deal or no deal at all.

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…

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.

Escrow Agent in the Sale of a Business

Escrow Agent in the Sale of a Business

When a business is about to be sold, the parties to the sale may find it beneficial to establish an escrow agent to handle the transfer of certain assets and cash between the buyer and seller. Many times the parties agree to use the escrow account held by one of the party’s business attorneys. However, in many cases the parties prefer to hire an independent escrow agent to handle the assets and cash that will change hands.

Important Agreements When You Sell Your Business

Important Agreements When You Sell Your Business

When working through a business sale, an inordinate number of resources on both sides of the table are dedicated to drafting and negotiating the Stock Purchase or Asset Purchase Agreement. This is true especially in the last one-to-two weeks before the closing. In fact, I’ve had clients remark that during their entire tenure as an entrepreneur, they never spent as much time speaking to their advisors as they did during the last week of their business ownership journey!

Selling A Business: Asset Acquisition vs. Stock Acquisition

Selling A Business: Asset Acquisition vs. Stock Acquisition

So you’ve decided to sell your business, but what structure is right for the transaction? Buyers and sellers often prefer different structures due to various factors which change based on the structure and which have different impacts on the parties. Generally there are three (3) categories of factors that drive the eventual structure of a deal: (1) business issues, (2) assignments and consents, and (3) tax issues.

Employees Ownership Incentives — Implications When You Sell

Employees Ownership Incentives — Implications When You Sell

Many entrepreneurs faced with the demands on cash of a growing business are tempted to sell equity to outside investors, or perhaps give away stock to retain a valuable employee. Diluting your stake in this way may solve the immediate problem, but it can have unforeseen consequences when the business eventually is sold. Stockholders’ personal circumstances evolve in different ways over the lifetime of a company, and whatever the original intention everyone may not be on the same page when you are ready to sell.

Have You Considered a Management Buyout?

Have You Considered a Management Buyout?

Management Buyouts, or MBOS, can sometimes have a negative connotation. Maybe that’s because it sounds like the management team is getting “taken out”. On the contrary, it is the exact opposite. A Management Buyout is a fancy acronym for when the current managers buy controlling interest of a company from its owners. That’s a good thing for management!

Letter Of Intent: Saving You Time & Money When Buying Or Selling A Business

Letter Of Intent: Saving You Time & Money When Buying Or Selling A Business

If you have the opportunity to buy or sell a business, negotiating the terms of a letter of intent (an “LOI”) is one of the first and most critical steps in the process of completing the transaction. A well-written letter of intent provides a valuable foundation for a potential transaction as it captures the parties’ intentions with regard to the structure, timing and material terms of the transaction. An LOI often imposes significant obligations on each of the parties, and consequently is typically the product of fairly intense negotiations between the parties.

Defining the Indemnification Basket: Deductible Baskets & Tipping Baskets

Defining the Indemnification Basket: Deductible Baskets & Tipping Baskets

The “indemnification basket” is one of the most important deal terms found in the Letter of Intent and ultimately in the Purchase Agreement and is often misunderstood by both the buyer and seller of a business. Buyers want the basket to be as low as possible and Sellers want it to be as high as possible. Baskets may be one of two types: a deductible basket or a tipping basket.

The Importance of a Business Sale Non Disclosure Agreement (or NDA)

The Importance of a Business Sale Non Disclosure Agreement (or NDA)

A typical entrepreneur invests a tremendous amount of time, effort and money in building a business. That is why it is so important for entrepreneurs to make sure employees and third parties who work with the business are prohibited from improperly using or disclosing any confidential or proprietary information of the business(e.g. customer lists, trade secrets and financial statements). Similarly, and in connection with the opportunity to sell a business, it is critical for the owner of the business not to provide any confidential information to a prospective purchaser until that party has signed a well-written non disclosure agreement.

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