Financing is an important aspect when buying or selling a business. The SBA can play a huge role in this process. An important step in the process is knowing where you are trying to go before knowing what tools you will need to use. When structuring a deal the fundamentals come first before the deal structure.
Today we’ll be talking to John Thwing who is known as The SBA Guy. John has closed over 400 SBA financed transactions and is currently at Anchor Bank. Today, John shares a ton of insights about SBA structure, the loans, how they work, and the role the lender plays in relationship to the buyer, seller, and broker. He also provides great insights on all the deals that he has done, and what constitutes a qualified buyer for going into a business and how a seller can use the SBA to exit their business.
In This Episode You’ll Learn:
- John shares how he started at his first bank in the mail department and ended up becoming The SBA Guy today.
- How the role of the SBA is to guarantee loans for financial institutions.
- Deal structures and restrictions with SBA financing.
- How the SBA tool may not be a good fit and how John helps sellers and agents recognize that.
- How cash flow is the driver of value, and banks want loans that will be repaid.
- Due diligence, determining value and prequalifying for financing.
- How SBA lenders validate 3 years of tax records for ecommerce businesses.
- Marketplaces for matching buyers and sellers.
- How hiring an appraiser is not always the best first step.
- Change of ownership is not part of the SBA loan structure.
- Qualifying buyers and looking at liquidity, transferable skills, background, and expenses.
- Discuss financial fundamentals and listen to the market and your advisors.
- The resume and skill sets of the buyer and the seller building themselves out of the company affect the transferability of the business.
- Going from a technician to an entrepreneur to becoming an investor and replacing yourself.
- Make sure that your lender understands the structure of the SBA being a tool.
Links and resources:
About John Thwing:
John Thwing is The SBA Guy. John is one of the busiest lenders in Minnesota and has closed over 400 SBA financed transactions. Areas of expertise include owner-user commercial real estate, business acquisitions, expansions, partner buyouts, franchise and construction financing. John regularly speaks on the topic of small business financing, presenting to industry groups, advisors and individuals interested in buying a business or commercial building, and was recognized by C-LEVEL Magazine with a 2016 Champion of Business award.
John is a fifteen-year member of the Minnesota Commercial Association of Realtors(MNCAR). He has also volunteered as a business plan judge for the University of St. Thomas MBA program and for BPA-DECA. John has been in banking for 29 years, and is a graduate of the Carlson School of Management at the University of Minnesota. Anchor Bank has funded over $28 million in SBA loans so far in fiscal 2017, and we are currently the #2 SBA 7a lender in MN/WI.
The best ways to get in touch with John are through emailing him at Anchor Bank or calling him on his cell phone: