Unlock the hidden value in your life insurance policy! In this episode, Phil dives into the world of life settlements—what they are, who qualifies, and when selling your policy could be a smart move. Hear real stories of clients who received far more than their cash surrender value and discover the key signs that it might be time to explore your options.

Whether you're a senior, a business owner, or a financial advisor, this is essential viewing for anyone looking to make the most of their life insurance.

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Chapters:

0:00 – Introduction to Life Settlements

0:30 – How Phil Entered the Life Settlement Industry

2:40 – What Is a Life Settlement?

4:13 – When Should You Consider a Life Settlement?

7:18 – Term vs. Universal vs. Whole Life Policies

10:05 – Ideal Age & Health for a Life Settlement

12:21 – Real Client Examples: How Much Cash They Received

16:32 – Pitfalls to Avoid

20:02 – How Life Settlement Buyers Determine Value

24:49 – Why Many Financial Advisors Don’t Know About Life Settlements

28:03 – Tax Implications of Selling Your Policy

32:15 – Common Uses for Life Settlement Cash

36:40 – How to Get Your Policy Evaluated

40:50 – Debunking Whole Life Insurance Myths

45:00 – Final Takeaways & Next StepsMore Subject Matter Experts Playlist  

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https://mysbaloanpro.com⁠ - My SBA Loan Pro Podcast

In this episode, Tim Malott, a seasoned M&A Advisor and Investment Banker, reflects on his journey from CPA and Bank President to Managing Partner of Shoreline Partners. With over 30 years of experience, Tim shares his approach to problem-solving, the nuances of selling privately held companies, and his commitment to creating an unreasonable value for his clients.He offers insight into the M&A process, the distinctions between business brokers and investment bankers, and the importance of preparation and storytelling in maximizing business value.Whether you're a business owner, investor, or simply interested in mergers and acquisitions, this episode provides valuable perspectives on navigating the complexities of the industry.Stay tuned for actionable tips and expert advice from Tim throughout this entire episode.If you liked this content, let's connect on social media:Instagram: https://instagram.com/mysbaproTwitter: https://twitter.com/mysbaproLinkedIn: https://linkedin.com/in/ryanpatryckChapters:0:00 - Introduction1:02 - The Start of Creative Problem-Solving2:47 - Genesis of Shoreline Partners4:09 - What Shoreline Partners Does7:44 - The M&A Process: From Preparation to Closing10:02 - Shoreline vs. Business Brokers: Key Differences12:14 - Delivering Unreasonable Value17:11 - Preparing Your Business for Sale19:10 - Managing Seller Emotions During M&A21:35 - Understanding Buyers and Financing24:11 - Industries Ripe for Acquisition in San Diego25:28 - The Current M&A Market and Future Predictions27:50 - The Risks of Waiting to SellMore Subject Matter Experts Playlist   • Subject Matter Experts Face to Face I...  ⁠More ThinkSBA Resources⁠https://calendly.com/thinksba - Schedule Callhttps://g.page/thinksba - Google Business Page & Reviewshttps://thinksba.com/faq - Frequently Asked Questionshttps://mysbaloanpro.com⁠ - My SBA Loan Pro Podcast   / @thinksba  

Today, we’re discussing the structure of most business acquisition transactions when using SBA financing. If you’re looking to acquire a business, understanding these financing components is critical.

Let’s break it down.

SBA Loan Structure Overview Most SBA-financed business acquisitions involve three key components:

This three-tiered structure is designed to align the interests of all parties involved while ensuring the deal is well-capitalized.

Financing Larger Transactions

For acquisitions exceeding $5 million, additional mechanisms like Pari Passu arrangements may be utilized. In this structure, additional lenders provide funding on equal terms with the SBA loan. This allows buyers to pursue larger opportunities while maintaining similar financial leverage.

Interest Rates and What to ExpectSBA loans are known for their competitive interest rates, which are tied to the Prime Rate. The range typically falls between Prime + 0.75% and Prime + 2.75% for SBA loans above $500,000.

Where you fall within that range depends on two primary factors:

To secure the best terms, it’s essential to present a well-prepared business plan and demonstrate your financial and operational capabilities.

Key Advantages of SBA Financing SBA loans are structured to support buyers in acquiring businesses efficiently. Key benefits include:

Conclusion:SBA financing is an excellent option for structuring business acquisitions, offering flexibility, accessibility, and competitive terms. Whether you’re acquiring a business for $500,000 or over $5 million, understanding these components is vital to your success.

Host Introduction:

In today’s episode, we’ll focus on SBA financing for franchise startups. If you’re thinking about starting your own franchise location, this is the roadmap you need to follow to secure financing and set yourself up for success.

Let’s dive into the process.

Understanding SBA Financing for Franchises

SBA loans are an excellent option for funding franchise startup locations. They provide flexible terms, competitive interest rates, and the ability to finance many of the costs associated with launching a franchise. However, like any business loan, there are steps and upfront costs you need to address before submitting your application.

Steps to Prepare for SBA Loan Submission

To secure SBA financing, you’ll need to follow a series of essential steps:

1. Qualify with the Franchise

Before anything else, you need to ensure you meet the franchise’s qualifications. Most franchises have specific requirements for financial stability, business experience, and operational readiness. It’s critical to get their approval before moving forward.

2. Buy Your Franchise Territory

The next step is to purchase your franchise territory. This formalizes your agreement with the franchisor and lays the groundwork for your startup.

3. Find a Location

Location is key to your franchise’s success. Once you’ve identified a viable site, you can proceed to the next step.

4. Execute a Letter of Intent (LOI)

The LOI is a non-binding agreement that outlines the terms for leasing or purchasing your selected property. It’s an important document that lenders will want to review.

5. Hire an Architect & Apply For Permits

At this stage, you’ll need to engage an architect to prepare detailed drawings and develop a preliminary construction budget. This budget should include all soft costs including permitting fees, materials, labor, and furniture, fixtures, and equipment (FF&E).

Preparing Your Loan Application

Once you’ve completed these steps, your SBA loan application is ready to be submitted to lenders. These items demonstrate to lenders that you have a clear plan and a viable business opportunity, both of which are essential for loan approval.

Important Considerations for Borrowers

It’s important to understand that many of these steps—such as paying for franchise fees, architectural drawings, and initial soft costs—must be completed before you’re guaranteed funding. This means you’ll incur some upfront expenses, which can feel risky.

However, working with a trusted partner like ThinkSBA can make all the difference. We guide you through the process, ensuring that your efforts are focused, your expenses are justified, and your financing is positioned for approval. Our expertise gives you the peace of mind that your hard work will pay off.

Conclusion:

Launching a franchise startup is an exciting venture, but it requires careful preparation and strategic planning to secure SBA financing. By following the steps we’ve outlined and partnering with a trusted advisor like ThinkSBA, you can confidently navigate the process and position yourself for success.

Join Ryan Smith, Principal and Founder of ThinkSBA and Attorney Scott Oliver with Lewis & Kappes as they delve into the intricacies of the SBA loan legal closing process, recent SOP changes, and the crucial role lender legal counsel plays in ensuring lender compliance.

Bruce Marks has made a career out of mastering lower middle market business acquisition financing by leveraging the SBA 7(a) loan program coupled with a Pari Passu conventional loan for loan requests that exceed the SBA's $5 Million borrowing limit.

⁠⁠⁠⁠https://calendly.com/thinksba⁠⁠⁠⁠ - Schedule Call

Working capital has many meanings and definitions depending on the application of funds. For the purpose of this podcast, I will define working capital as capital provided to a business to fund tangible recurring business expenses or capital expenditures.

Working Capital For Growth

As an SBA Loan Broker, I often receive inquiries from SMB owners for working capital to fund the growth of their business. Their definition of working capital is the transfer of funds from the lender's bank account to their bank account without any strings attached. This is not the definition of working capital.

Let's set the record straight.

Banks provide working capital to fund specific uses such as the purchase of equipment, furniture, fixtures, tenant improvements and fixed expenses such as rent, utilities, maintenance, and employee wages.

Therefore, it is important to understand that in preparing your application to submit to SBA lenders, you will need an itemized list of what we call "Use of Proceeds." Just as it implies, the phrase "use of proceeds" simply means identifying the tangible items the funds will be used for by the borrower.

To be crystal clear. When a borrower is requesting working capital for growth, they should not expect the funds to be sent to them without providing a detailed use of proceeds.

Working Capital To Acquire a Business

When applying for an SBA loan to acquire a business, lenders will nearly always provide working capital to sustain the borrower through the transition of the business. This typically includes working capital to pay up to 90 days of fixed expenses and what I refer to as "free working capital," which means the ability to spend the capital without strings attached. This amount of free working capital is normally small compared to the larger amount used for tangible capital expenditures or recurring fixed expenses.

You Are Ready To Apply

Now that you know how to properly prepare your application, you can successfully apply for working capital to grow your existing business or successfully transition a newly acquired business.

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Join Ryan Smith, Principal and Founder of ThinkSBA, as he sits down with John Homan, esteemed SBA Loan Workout Specialist.

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Chapters:

Link to full episode: https://youtu.be/w0S0tgSccTQ?si=BiYYCUf-5GwnUPEw

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Ryan Smith, Principal and Founder of ThinkSBA, sits down with Sol Rosenbaum of SR Engineering and Consulting, a seasoned mechanical engineer with over two decades of experience in energy engineering.

Link to full episode: https://youtu.be/c8RpLw9Vo2M?si=dd5TOeUZx2VnxsTl

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Join our Host Ryan Smith, Principal and Founder of ThinkSBA, as he interviews Bethany McClellan, President of Rapid Business Plans.

Chapters
0:00 - Introduction

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