Waste Dive’s Post

Predicting a closing date for a business sale is like predicting any other future. It's not impossible, but it can turn into a fool's game. The fact is that the closing timing often depends on people outside of the deal. I sum them up as "third parties." (May need something catchier.) Third parties may include landlords, lenders, creditors, employees, investors, customers, vendors, etc. I could spend a post on each of these groups but chose to focus on creditors here. Even the term "creditors" could involve many subgroups, so I'll stick to secured creditors. That is, people who have perfected their lien interest in the selling company or its assets by filing financing statements. Some people may think What's the big deal with secured creditors? They send you a payoff statement and you pay off their debt at or before closing. That's true! Sometimes. Many times it's not that simple. Take an SBA loan for example. If the sale is for some company stock instead of assets, even a minority transfer of stock, there's a change process to follow with the SBA. And any time there's a "process", there's a cost: time. And that added time often blows up the buyer and seller timeline. Creditor liens show up in many forms. I recently helped a client sell their business with a lien tied to some equipment financing. The collateral was limited to the equipment that was financed, but that equipment was part of the sale. The buyer wanted to take over the lease, but the creditor refused. Here was a buyer approved for 7-figure financing but rejected for a relatively small equipment loan. Crazy? Not really. Fortunately, we got in front of it and although it added some stress to the deal it didn't add time. If closing timing is important (and when is it not), ask your clients about the third parties early in the sale process, even before they sign a letter of intent (LOI). This internal review will save an incredible amount of time for closing, and time is money. #mergersandacquisitions #exitplanning #businesslawyer

Merchant Homes Partnerships Ltd, established in 2007, has ceased trading after achieving a £21m turnover. The company specialised in private and social residential housing. Current trading conditions had proved to be “particularly challenging” with increasing costs, inflationary pressures, unforeseen delays to new contracts and a general downturn in buyer confidence across the sector resulting from the rise in interest rates. The directors explored options to save the business but concluded that there was no viable alternative to giving up. Credit insurance can assist by providing coverage in case a customer fails to pay their trade credit debts due to insolvency or protracted default. This protection helps safeguard the cash flow by reimbursing the insured business for the outstanding amount, reducing the impact of bad debts. Knowing that a significant portion of receivables is insured can provide business owners with peace of mind. This confidence allows them to focus on growth strategies and day-to-day operations without constant concern about the potential impact of non-payment on their cash flow. #TradeCredit #CashFlowProtection #CreditInsurance #BusinessChallenges #HousingSector #FinancialProtection #RiskManagement Source: https://lnkd.in/e_qeqHfj

Michigan was an early adopter of UCRERA and seeing the benefit of its impact on Real Estate they amended it to include operating companies. We're seeing this in more and more states as they contemplate UCRERA. https://lnkd.in/gJHWGbbN #commercialreceivership #receivership #receiverships #insolvency #turnaround #turnarounds #turnaroundmanagement #restructuring #commercialrealestate

All that glitters isn't gold! I've seen countless small business owners sold dreams by merchant services companies. Promised not only savings but help with canceling non-cancelable leases (it's called a non-cancellable lease for a reason), contract buyouts, you name it. Only to end up in a worse position than they started in. If the answer to every question is, "Of course we can do that." Please STOP! Nothing in this world is perfect, and if it sounds too good to be true, it's probably bullshit... #merchantservices #creditcardprocessing #isaiahknowsfintech

🏡 BRR TO HMO CONVERSION DEALS 🔥 . . These new deals we are doing, are absolute game changers! (We’ve bought two ourselves already 😁) Key info on the particular deal on this reel: - You can develop & convert under permitted development rights if you don’t want to go through planning, - If you are happy to go through planning, you can add more than 6-beds, resulting in an “all money out deal” + £32k, with a net profit per month of ~£1,700, - By leveraging bridging finance, you only need £175k to enter this deal, - Upon refinance, on the 6-bed option, you have created £166,000 of net worth for yourself. This is because the 25% left in the deal, is your equity. This will only increase if you choose to extend and convert to 9-beds. If you are looking to build serious cashflow and wealth/net worth, in a hands-off way, just like we are, these deals are for you! DM the word “DEALS” if you’re interested in deals like this!

This was one of my more recent closings and the first of 3Q24. Was able to come up with a #creativefinancingsolution for this #acquisition which allowed the Borrower to add another property to their #portfolio. If you're looking to grow your #empire, #purchase #realestate, and/or #aquireabusiness, please let me know how I can help. #skysthelimit #trustedadvisor #juntospodemos #sisepuede

🏡 BRR TO HMO CONVERSION DEALS 🔥 . . These deals we are doing, are absolute game changers! They're so good, we've kept two ourselves! Key info on the particular deal on this reel: - You can develop & convert under permitted development rights if you don’t want to go through planning, - If you are happy to go through planning, you can add more than 6-beds, resulting in an “all money out deal” + £32k, with a net profit per month of ~£1,700, - By leveraging bridging finance, you only need £175k to enter this deal, - Upon refinance, on the 6-bed option, you have created £166,000 of net worth for yourself. This is because the 25% left in the deal, is your equity. This will only increase if you choose to extend and convert to 9-beds. If you are looking to build serious cashflow and wealth/net worth, in a hands-off way, just like we are, these deals are for you! Please get in touch if you’re interested in deals like this!

As a M&A advisor, it’s important to stay on top of industry changes that can impact business acquisitions. Starting October 1st, 2024, the SBA Guaranty Fees for 7(a) loans between $1M and $5M are increasing. A banker I work with shared the new details: - 3.5% on the first $1M of the guaranteed portion - 3.75% on anything over $1M For example, on a $1.512M loan, the fee will rise from about $17,000 to $40,000—an increase of $23,000. The silver lining? Interest rates are showing signs of dropping, which could help offset these higher fees. Keep this in mind if you’re considering a business acquisition.

Talked with a buddy the other day about his FIRST 3 deal pre screening questions for business acquisitions 1. What's management structure? Through this question, work to find out who's running it, and if they will remain in place 2. Can it be semi-absentee Based on your first question, you'll know the answer to this one. Remember, you're not buying a job, you already have one of those 3. Do the numbers work? Know what you're pre qualified for with an SBA, work out what the seller is willing to carry and do the math on what you'll net If ANY of those 3 aren't met, it's a no go For reference, this was his last deal: Purchase Price - 2.6M Put ~5% down Seller matched that SBA loan for the rest Full standby on seller note Sellers staying on $180k / yr after debt I broke the ENTIRE process down of finding deals and this particular example in an article I wrote here. https://lnkd.in/gAAzXeY6

Are you facing risk of Bankruptcy or Insolvency? The majority of loans we arrange at Engage are to help businesses get off the ground or grow, however every now and then we encounter a business that is struggling or is no longer viable. It may be that an exit can not be achieved cleanly or that a buyer can not be found. This could be down to market changes (we have seen enough of those in the last few years) or it could be down to another company letting them down. We are facing challenging times. If you are a director of a company facing insolvency and need to borrow money to finalise a liquidation, Engage can help directors to buy back their business. If you are a previous director facing bankruptcy (or already in bankruptcy or discharged from bankruptcy) and need to repay a main creditor, Engage can help. We have access to lenders who can offer property-backed loans to stop bankruptcy or winding up petitions from becoming an order, to cancel or annul an order or to seek a voluntary agreement with creditors when liquidating a company or to deal with a trustee’s interests post discharge. For all things business finance related, don't wait any longer, connect with us at Engage. We work with specialist lenders ready to provide funding (subject to eligibility). #engagebusinessfinance #smes #businessowners #cashflow #finance #propertyfinance #tradefinance #insolvency