Jennifer and Eric talk with Kathleen Kelly and Greg Giacopelli to get a full understanding of SBA loans and when it makes sense for business owners to apply for one. Kathleen is an SVP SBA Relationship Manager at Webster Bank and Greg is the VP of Business Banking Relationship Management at Eastern Bank. There are a number of considerations and rules to understand about SBA loans, how a bank sees a potential candidate, and which loan option might be best for you. In this episode, Kathleen and Greg do a deep dive into the different situations you need to be aware of before applying for this type of loan. 

Key Points

[1:40] What is an SBA loan?

[4:25] A banker or loan officer is going to look at three years of historical tax returns. This can be challenging if two of those years were COVID years.

[5:45] What factors are banks analyzing about the business before issuing an SBA loan?

[8:45] The bank first has to make an internal decision on whether they want to issue this type of loan to you.

[9:25] There are SBA rules and there are also bank rules. Some banks will not touch particular industries just because they’ve been burned on them in the past.

[11:05] What’s the difference between an Express, 7(a) and 504 loan?

[17:55] Really be conscious of the types of income projections you have. The bank will be double-checking and scrutinizing that.

[26:45] When is it a good time for a business owner to talk to an SBA loan officer?

[31:20] Try to send financials over as early as possible.

[32:35] What is a term sheet or a commitment letter?

[37:30] If you want to get the best out of your loan, you really want to make your bottom line as strong as possible.

[43:30] Both Kathleen and Greg end the show with their tips of the day.

Tip of the Day:

Kathleen’s Tip: Do not cut corners on advisors. It makes a world of difference hiring qualified and efficient professionals.

Greg’s Tip: Make sure you are thoughtful and reasonable about your projections. Don’t go overboard!

Mentioned in this Episode

Tworld.com/locations/boston

Riw.com

Transactiontalk.com

Kathleen Kelly

Website

LinkedIn

Phone:  617-416-6567  

Email:  [email protected]

Greg Giacopelli

Website

LinkedIn

Phone:  781-231-4897

Email: [email protected]

Disclaimer:

The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing on this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.

Quotes

“There are SBA rules and then there are bank rules. Some banks just won’t touch a restaurant [for example] or they got burned on a certain type of [industry].”

“Banks differ on how they price. National SBA lenders do a loan, price them variable, and sell them on the secondary market. That’s the model. The regional banks price them however they price them.”

“Having constant communication with the lender is really important and having it as early on as possible.”

Your hosts Jennifer and Eric welcome Scott Giles onto the show. Scott recently sold his business, ScoreBuilders, and worked directly with Jennifer and Eric during the selling process. In this episode, he shares some real-life examples of what the sale process was like, key learnings he experienced, and some unexpected challenges he experienced when it came to selling his business.

Key Points

[1:40] A little bit about Scott and why he decided to sell his business.

[3:55] Why did Scott pick Jennifer and Eric’s firm?

[5:00] Formally, Scott interviewed three different business broker groups.

[8:40] How did Transworld go about finding a good buyer for Scott’s business?

[10:20] Scott and his team at Transworld decided to set a formal date for the prospective buyers to bid on his company.

[12:15] Scott had to prepare for the buyer to completely deconstruct his business and do their due diligence. It’s a stressful moment because they’re looking at everything, including their finances.

[16:40] Scott shares his experience on why having a specialized attorney early in the process is critical.

[20:35] Scott did feel overwhelmed at times because the prospective buyer had a lot of questions and they wanted answers ASAP.

[22:00] The buyer was asking for procedures and policies that were intuitive to Scott and his wife Traci but didn’t exactly have formal documentation for.

[26:25] Scott still has plans to be involved in the business despite selling it. Why was this arranged in that way?

[30:30] Scott wants to ensure there’s a smooth transition and integration for the buyer.

[31:30] What would Scott do differently knowing what he knows now?

Tip of the Day:

You need to have a great business broker team on your side in order to make the sale of your business successful. Surround yourself with a great team because you will need it!

Mentioned in this Episode

Tworld.com/locations/boston

Riw.com

Transactiontalk.com

Scott Giles

Website

LinkedIn

Disclaimer:

The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing on this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.

Quotes

“After 34 years, it just came to the point where there was more regulation, more documentation, more HR, so randomly out of the blue, I said let’s sell the business.”

“Some of these companies we met 4 or 5 times on different Zoom meetings. We were having enough activity that we were feeling really good and we decided to [speed up the buying process].”

“The requests didn’t stop [from the buyer]. Every time we thought we were done, it was can you produce this document, can you explain why your inventory has these levels, and why it was different pre-pandemic.”

Transaction Talk welcomes you to the fourth and final episode of a four-part series that details what business owners need to know about selling their businesses. Your hosts Jennifer and Eric interview Russ Stein, a Mergers & Acquisitions Attorney with more than 30 years of experience working as a lawyer and shareholder at Ruberto, Israel & Weiner, P.C. In this episode, Russ shares his perspective on what business owners should look out for from a legal perspective when it comes to selling their business.

Key Points

[1:30] You don’t just need an attorney, you need a Mergers & Acquisitions attorney.

[2:40] What does Russ first like to talk to a business owner about when they’re getting ready to sell their business?

[4:15] Business cycles do happen and that makes business owners consider selling before a big dip.

[5:25] At what stage does Russ step into the selling process?

[7:35] What are some of the most common concerns business owners have?

[8:40] How many written contracts do you have with vendors, third-party suppliers, etc?

[11:25] What do you do if you have remote workers on your staff?

[15:10] How should business owners think about warranties when they’re about to sell their business?

[20:15] How should a seller think about personal liabilities?

[23:45] Everything you talked about needs to be in writing. Nothing verbal should be ‘assumed’.

[24:10] What should business owners look for in an M&A attorney?

[29:00] Who would Russ add to his team of advisors?

[32:35] Why would a business owner want to do an asset sale vs. a stock sale?

[35:30] It’s critical to get a lawyer in your selling process as early as possible to save you a mountain of headaches.

Tip of the Day:

Do your best to avoid surprising your lawyer. Be honest and upfront as early and as soon as possible, even if it might make you or your company look bad. The sooner they know, the better they can protect you/correct the error.

Mentioned in this Episode

Tworld.com/locations/boston

Riw.com

Transactiontalk.com

Russell N. Stein

Website

LinkedIn

Phone: 617-742-4200

Email: [email protected]

Disclaimer:

The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing on this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.

Quotes

“If there’s hundreds of [third-party] contracts that need to be reviewed that can be a big chunk of time and if you’re under time pressure after closing, that can create anxiety for us and the buyer.”

“Estate tax can be a real surprise to a buyer that is from another state that hasn’t bought a company in Massachusetts before and is unaware of this tax. The seller might want the buyer to compensate for this tax.”

“I recommend we do an up-front review of consent requirements in an asset deal and in a stock deal. One time, in an asset deal, it came back that [the client] needed 165 consents to do an exit.”

Transaction Talk welcomes you to the third episode of a four-part series that details what business owners need to know about selling their businesses. Your hosts Jennifer and Eric interview Scott Sagan, a CPA with over 30 years of experience in accounting, auditing, taxation, and more. Scott shares from a CPA perspective how business owners can maximize their company’s value and also make sure that their numbers are realistic to a potential buyer.

Key Points

[2:00] What does a typical conversation look like with a CPA and a business owner looking to sell his/her business?

[3:55] Every business owner wants to maximize their value, but it’s important to be realistic with that expectation.

[5:05] How does Scott work with business owners and prepare them properly for a sale?

[7:25] What other people should be on a business owner’s team when they’re looking to sell?

[9:25] What role does a CPA play during the sale of a business?

[11:55] It’s important to have a seasoned advisor who is used to these types of transactions.

[15:10] What types of documents does a CPA need to properly do their due diligence?

[18:00] What happens if there are two CPAs on the team and they disagree with the numbers/projections?

[18:45] Scott explains what a cash-free/debt-free purchase is.

[21:55] What are some of the benefits of a stock sale vs. an asset sale?

[23:25] What types of taxes should you be thinking about when you’re getting ready to sell a business?

[27:05] Are different types of assets taxed differently?

[27:55] What should you look for in a CPA?

[31:00] Scott shares some examples of how he’s helped clients in the past with the sale of their businesses.

Tip of the Day:

Make sure you use seasoned professionals. Don’t get caught up in the cost of these professionals because, in the long run, they will save you more than the cost.

Mentioned in this Episode

Tworld.com/locations/boston

Riw.com

Transactiontalk.com

Scott Sagan

Website

LinkedIn

Phone: 781-569-4732

Email: [email protected]

Disclaimer:

The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing on this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.

Quotes

“Nobody wants to see their life’s work fail. They want to sell their business to someone who will succeed and take it to the next level.”

“I can’t stress enough the importance of getting a good team in place to really hash these things out prior to making a final agreement.”

“The last thing you want to do is sell the business and 15 months after a transaction, you have a huge tax bill that you had no idea that it’ll be that much.”

Transaction Talk welcomes you to the second episode of a four-part series that details what business owners need to know about selling their businesses. Your hosts Jennifer and Eric interview the Managing Partner of Boston Partners Wealth Management, James Connors, to discuss the important role a financial advisor plays in the sale of a business. They break down when you need a financial advisor, how they help business owners confidently know their numbers, and so much more.

Key Points

[2:45] Why is it so important to have a financial advisor on your team?

[4:35] What are some of the common reasons why a business owner wants to sell their business?

[8:10] How does James walk his clients through an exit plan and/or strategy?

[9:40] Selling a business after being a part of it for so long is a very scary thing, but by having the numbers by your side, you become a bit more confident in the process.

[13:10] What should somebody look for in a financial advisor?

[16:35] The communication style of the financial advisor is very important. Do you understand what they’re saying?

[17:00] You should always ask your financial advisor’s philosophy on risk.

[18:10] What happens if you have to switch financial advisors midway through a deal?

[22:30] It’s important to talk to your financial advisor before you begin the sale process.

[24:05] What makes James different from other financial advisors?

[29:05] James shares a play-by-play of how a typical business sale goes down.

Tip of the Day:

In addition to the finances, start to think about what you’re going to do with your life after the sale of your business. Reliving your Sunday every day gets boring quickly and people like to feel relevant. Business owners don’t plan to fail, but they often do fail to plan.

Mentioned in this Episode

Tworld.com/locations/boston

Riw.com

Transactiontalk.com

James Connors

Website

LinkedIn

Phone: 978.689.6995

Email: [email protected]

Disclaimer:

The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing on this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.

Quotes

“When a business owner knows (his numbers) and he knows that everything is in good order, now they’re confident and it replaces the fear.”

“Look for an advisor that communicates clearly and effectively. You want to understand what they’re recommending and be able to have open communication.”

“We are all here to help the business owner optimize the best deal.” 

When it comes to selling your business, there can be a lot of unknown factors that many first-time sellers might not be aware of or even think about. It’s critical to have the right team on your side to help you through the sale of your business and to make sure you’re getting the best deal available to you. Transaction Talk welcomes you to their first episode out of a four-part series that details what business owners need to know about selling their business. In this episode, Aaron Fox, Managing Director at Transworld, explains the vital role a business broker plays in the selling of a business. 

Key Points:

[2:55] Why are business brokers so critical when business owners are getting ready to sell their businesses? 

[3:45] Should you reveal more information to your business broker than you would to your business lawyer? 

[4:50]Remember, these people are working for you. It’s important to be honest and upfront with what’s going on. 

[9:15] The key players on your team should be: Accountant, attorney, financial advisor, and a business broker. 

[9:30] Aaron explains why these four people are important during the selling process. 

[12:25] What type of attorney should you get when you’re selling the business? 

[18:15] How do you maximize your profits and sell price? 

[20:45] After you find a buyer, what’s the next step towards moving the deal forward? 

[25:25] When does it make sense to reveal tax returns and other sensitive financial documentation? 

[28:35] How long does the due diligence of a business typically take? 

[34:35] ]After due diligence, there’s still a lot of moving pieces that need to be checked. Insurance policies, payroll, bank underwriting, business plans, etc all need to get finalized. 

[39:50] What can business owners do to make the closing process a lot smoother? 

[42:45] What should sellers look for in a business broker? 

[46:45] As a business owner, you need to keep operating your business as normal until you have the money in the bank. You are still the owner and things should not be slipping through the cracks! 

[47:55] A good team is when all parties involved are communicating with each other. It’s important to get these four key team players in a room together and collaborating. 

Tip of the Day:

Remember, your team is there to help you and they’re working in your best interest. Talk to them, ask them questions, and readily share information with them. 

Mentioned in this Episode:

Tworld.com/locations/boston

Riw.com

Transactiontalk.com

Aaron Fox

Phone - 781-773-8922 

Email - [email protected]

Quotes:

“Finding a buyer is maybe 10% of the work and the other 90% comes from getting that deal across the finish line.”

“Your business broker is going to make sure your business is priced right, how do we justify cash flow, how do we tell the story, and how do we find these qualified buyers. Your broker keeps going and going.”

“The biggest mistake is not telling your trusted team upfront that something might come up during due diligence.” 

The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing in this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.

Business broker Jennifer Fox and attorney Eric Sigman team up to provide a 360-degree view of the current Boston Business for-sale market. From buying and selling to franchising and everything in between, Transaction Talk breaks down the deal process from a business, brokerage, and legal perspective. A resource for business owners, buyers and entrepreneurs, Transaction Talk offers interviews and real-life deal experiences from industry experts and key transaction players.

The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing in this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.