Dec 27, 2017
Many larger deals are
SBA-oriented. This is a better method for buyers because they get a
10 year repayment period, and it is better for sellers because they
can get more money. In 2018, SBA lending limits are changing and
they will be bringing 90% of the funds to the deals. It is really
good for buyers and sellers.
Today, we are talking with
Stephen Speer who is the VP and Business Development Officer at
BankUnited Small Business Finance. Stephen is a lender, not a
banker. Bankers have a tendency to over-promise and underdeliver.
We had a bank deal that took over 90 days to close. Both the buyer
and the seller were beside themselves with frustration. With a
transaction we recently did with Stephen, we got a commitment
letter in 34 days which put us two weeks away from
This is an SBA transaction that
will close in 30 to 45 days which puts us on the same playing field
as cash buyers. Today, we are going to cover benefits of the new
SBA guidelines and how they benefit both the buyers and the
the SBA aspect of buying and selling online businesses is becoming
- Stephan has been lending for 25 years and is
now located in Tampa, Florida.
works in the ecommerce business acquisition space.
has been with BankUnited for the last two years.
SBA allows lenders to take a greater risk by guaranteeing 75% of
purpose is to encourage small business lending.
- Stephen has formed an ecommerce lending team
- BankUnited is a preferred lender and everything
is underwritten and funded in house, but the loan has the SBA
qualifications include income, assets, assets after closing,
credit, and collateral. Does the actual business cash flow based on
the structure of the deal.
- Asking the right questions to make sure the
buyer is the right fit for the ecommerce space and business that
they are purchasing.
- Getting financials up front and looking at a
solid year of tax returns and a ramp up year.
most sellers in ecommerce sell within three years because the
trajectory is going up in large multiples.
- Profit and loss statement plus addbacks equal
total earnings. Interest and one time expenses area add backs. Most
people want to minimize their tax exposure.
not commingle two businesses together when you are trying to sell
- Getting off of schedule cs and doing business
- Having an independent third party do a business
someone do ecommerce due diligence to poke holes in the
injection or down payment with 10 or 15 from the buyer and 10 or 15
from the seller in a seller note.
2018, the buyer will only have to come up with a 10% injection, and
the seller won’t have to come up with anything.
will have more sellers open to financing.
- BankUnited feels comfortable up to a $5 million
loan. There are different variables, but with the right buyer they
can go high.
will work with buyers on the SBA process.
does an SBA loan cost? There is a deposit for third party fees like
business valuation, appraisal, titles, and attorneys. It’s usually
about $12,000 that is financed into the loan. Plus a 3.5% SBA
the deal falls apart the money can be used on the next