LIVE: The Ultimate Buyers’ Playbook for 2021

Transcript

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Description: Andy and Jessica are very proudly welcoming you to another episode of The Deal Board Podcast. In today’s episode, they are sharing with you the ultimate buyers’ playbook for 2021. 2020 has left an incredible opportunity by the SBA incentives that have been allowing buyers to leverage themselves into deals, giving six months on principal and interest.

Listing of the week: Art Warsorff (Utah County) is selling a high-end restaurant takeout that was doing great pre-COVID-19. The owner created a special menu during COVID-19 that was particularly good for takeout and delivery, maintaining this way the relationship with customers, and keeping the business alive and blossoming. Asking price: $780,000 (the owner is willing to self-finance a portion of it). The business made $400,000 in 2019 and close to that also in 2020. Email Art at [email protected] or call (801) 557-6713.

Key Takeaways

[4:55] What is going on in 2021?

[5:15] Jessica talks about the incentives to take a new SBA loan.

[9:50] Why is this a life-time opportunity?

[13:07] There is competition for deals but that doesn’t mean there aren’t businesses to buy.

[13:50] You could get a really sizable business with the SBA loan, from 9 to 15 million dollars, depending on the deal.

[14:08] Some businesses experienced a boom as a result of the 2020 crisis.

[16:01] Deal of the week: Raymond Copell (Fort Lauderdale) sold a restaurant with a drive-thru, a sale that took almost five years of consistency, persistence, and clear communication. Asking price: $850,000. Sold at $600,000 with a cash deal.

[21:14] Jonathan Wolfson from Nature’s Expert

[22:18] Jonathan talks about how a lot of industries are going through a different phase where there is an old and a new type of ownership.

[24:56] Jonathan shares about the companies he purchased over the last five years.

[32:29] Jonathan talks about the opportunities he sees in the current marketplace.

[34:01] Subscribe to Transworld’s BizMatch.

[35:09] Listing of the week: Art Warsorff (Utah County) is selling a high-end restaurant takeout. Asking price: $780,000; the owner is willing to self-finance a portion of it. The owner made $400,000 in 2019 and close to that also in 2020.

[38:28] Andy and Jessica answer listeners’ questions (Q).

[38:30] Q1: What guidelines does the SBA use to qualify a business for a loan?

[40:22] Q2: Do banks accept seller financing as part of the down payment?

[41:20] Q3: Does the 90% guarantee reduce the Personal Guarantee in collateral?

[42:11] Q4: Does the SBA financing include businesses without real estate?

[42:32] Q5: Can you purchase real estate with the SBA program?

[43:45] Q6: Does experience matter?

[44:24] Q7: What are we seeing in terms of selling prices and multiples of EBITDA? Is it stable or increasing?

[45:34] Q8: Why should sellers care about the waves of owners selling their businesses?

[47:15] Q9: Are the SBA loans asked by the target business or by the person who is buying it?

[47:45] Q10: Can you buy a business with no money down?

[49:38] Q11: Can SBA loans be used to buy out a business partner?

[51:39] Q12: Are there any restrictions for buyers residing outside of the U.S.?

[52:45] Q13: Can the SBA loan be used by employees?

[53:29] Q14: What is the typical closing cost in addition to the down payment?

[54:30] Q15: Can you use your IRA for the 10% down payment?

[54:51] Q16: If you have good credit, do you still need to have personal collateral?

[55:40] Q17: Does Transworld release any valuation metrics on a monthly or quarterly basis in regard to current valuations in the marketplace?

[56:11] Q18: Do PPP dollars issued to a seller on Round Two have to roll over to the new owner?

[57:12] Q19: Does Transworld have offices in Atlanta, Georgia?

[57:25] Q20: Can an SBA loan be taken by a company instead of an individual?

[57:55] Q21: Are sellers hesitating to sell as a result of waiting for the PPP forgiveness?

[58:22] Q22: Should the EBITDA and SDE multiples equal each other?

[59:54] Q23: Why banks avoid doing smaller deals.

[1:01:01] Q24: What is included in the SDE?

[1:03:01] Q25: Are there any cons of an SBA loan?

Mentioned in this Episode:

The Deal Board Podcast

United Franchise Group

Transworld Business Advisors

Transworld on Linkedin

Transworld on Facebook

Call us — 1-888-711-9018

Email us [email protected]

Sign in at Transworld Biz Match

Call Raymond Copell at (954) 464-6290.

Email Art Warsoff at [email protected] or call (801) 557-6713

Mentioned in This Episode

• Subscribe to our YouTube and Comment Your Best Business Tip to Enter the Contest!
• The Deal Board Podcast
• Transworld Business Advisors
• Transworld on Facebook
• Transworld on LinkedIn