Alternative Investments, Buying & Selling a Company, Exit Planning

SBA Loans Help Finance Small Business, #1

In challenging times, small businesses can look for liquidity and financing in many places.  The various SBA loan programs are one of the better places to search. Because SBA loan guaranty requirements and practices can be change by the government at any time, it is important for applicants to obtain current and accurate information. This article is merely intended to help a business owner ( potential borrower) start thinking about these programs.  You must do your own investigation and research. The information here is not to considered legal or financial advice.  Just a prompt to start thinking about the topic.…

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Buying & Selling a Company, Exit Planning

Beware the Avalanche

Small Business Owners have often seen it all.  If your company is older than ten years, add in the business cycle to the long list of things that compromise “all”. But here may be something unique that these owners have not seen yet, at least at the level of magnitude that seems to be on the horizon. Consider this in you are thinking of moving on from your business.  There may be an avalanche of business owners attempting to leave or exit their business in the coming years. 8,000 people turn 65 every day.  This has been going on since…

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Buying & Selling a Company, Exit Planning

What Makes a Company Sell Quickly? Or at all?

The rule of thumb in the business brokerage world is that only 20% of companies sell each year.  This means that 80% do not.  Is your business in the top 20% or bottom 80%? If you are interested in selling in the middle of an economic crisis, the chances of selling your company are even lower. There are certain things a business owner can do to make their company sell faster.  Or even sell at all.  To start, the seller should know what buyers often look for. What are some of the things buyers look for? Good quality sales and…

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Buying & Selling a Company

Which Business Broker or Investment Banker to Sell Your Business?

You only get one chance to sell your business.  That’s ONE chance to cash in on your most important asset.  One chance to be rewarded for your life’s work. According to the New York Times, 80% to 90% of businesses listed for sale with a business intermediary never sell.   No doubt there are many factors that contribute to this that are outside of your control – the economy, the market, and the industry to name a few.  The one thing that you can control – hiring the right advisor that will act in YOUR best interest. If you see any…

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Buying & Selling a Company

Some Questions About Selling a Business

We often work with the owners of privately held companies. Here are some of the questions we get when our clients are thinking of selling their business. And some short answers to their questions. What is the value of my business? The best answer to this question is the price a buyer offers that you are ready to accept. A business valuation can result in different values depending on the purpose of the valuation. But for the sale of a business, it boils down to what someone is willing to pay and what you are willing to accept. Every buyer…

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Alternative Investments, Buying & Selling a Company

What Is Mezzanine Capital?

I get asked this question occasionally. The question is usually asked by non-financial directors/officers of client companies. It just came up again so here is a description. Usually mezzanine capital is defined as unsecured, higher-yielding loans that are subordinate to bank loans and other secured loans but rank above equity in the event of liquidation. Here is a more in depth explanation. Mezzanine is junior debt that is between senior debt and equity on the balance sheet. Therefore it is called mezzanine, a Latin word that means “middle.” But there is more. Mezzanine capital now means more than just subordinated…

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Buying & Selling a Company, Exit Planning

Legal Considerations of Exiting Your Business

No doubt your business exit will be a complex transaction. Without the proper planning and drafting of the associated legal documents the negative tax, business, and legal consequences may be far-reaching. A well designed exit strategy starts with your goals and executes your exit plan with the necessary consideration to the business, tax, and legal components of the available strategies. Caution must be exercised because too many attorneys practice “This is the way we do it” legal advice. Their methods may have adverse tax consequences and impact the amount you pocket from the transaction and on the business’ cash flow.…

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