|
From Brad · The June Memo
I have been doing this for close to 30 years, and I cannot remember a 12 month stretch where the rules changed this much. Oil hit $118. SBA seller notes went to full standby last June. Rates dropped to 9.50%. And two weeks ago, the SBA doubled the cumulative guarantee limit from $5 million to $10 million, effective July 4th.
That last one is not just a bigger number. The 7(a) and 504 programs are now decoupled. For the first time, a buyer can access the full $5 million through 7(a) and a full $5 million through 504, on the same business, without one counting against the other. For buyers looking at deals that include real estate alongside the business, the capital structures available today did not exist six months ago. I wrote a full breakdown below because this is exactly the kind of change that matters.
I spent 20 years as a bank officer before starting CLX. That means when I look at your deal, I am thinking the way the person approving or denying your loan thinks. I know what the credit memo needs to say. I know what the SBA reviewer flags. And I know, truthfully, that most of the advice floating around right now has not caught up to what happened on May 18th. That is why we write these pieces. Not to market. To make sure nobody walks into a closing table with outdated assumptions.
73% of our volume is in business acquisitions. That is where the complexity lives, and that is where pattern recognition from 1,500 deals reviewed matters most. We rebuilt our website and built free Deal Tools around that reality. If you need CRE, equipment, construction, or working capital, we still handle all of it. But acquisitions are the engine, and we are not shy about saying so anymore.
|