Sellers are paid and working capital has hit the bank. Finally closed on my first acquisition. Quite a journey to get to this phase, but excited for the next step. It's a PR (public relations) business here in Boston, 20 years old with 7 employees. I know I haven't joined a lot of the calls and be super active in the group recently, but can attribute a lot of the mindset and approach that I used throughout the search process to various people in this group, so just want to say a quick thank you!

I had a buyer for one of my self-storage facilities who wanted to make a decent offer close to asking price. When the bank tried to asses the value of the business, they used industry average for expense ratios, opposed to actual. My facility runs extremely efficiently with no climate control, no lights, automated software, no employees, remote managed, etc..... My expense ratio's are under 18%, but the bank uses 28% as an industry norm, and that is how they calculate the NOI and ultimately the value. This is a huge swing in valuation, as this industry uses a CAP RATE (basically a 10x-20x multiple) to determine value. It also messed up the DSCR, which is just as important. We tried to mix in some owner financing, but the bank still counts it as debt, even with a 2nd place lien. Every dollar I lower the sale is a dollar of profit. Has this been happening to anyone else? Any suggestions?

Many of you plan to use the SBA 7a program to finance your acquisition - and a few BIG changes are coming Oct 1st. - 5% minimum equity injection from the buyer - QoE required on deals > $3M - And several others And that's not including lender post-liquidity requirements. If you're wondering how your deal stacks up in this new environment, I created a SBA Stress Test tool to show you how. Input your capital structure details and see if your deal 'pencils out' before engaging with a lender or SBA broker. Check it out here: SBA Stress Test What are your questions following this latest change? Let me know below!

anyone here has a service based business and has employees on 1099 contract? I am currently working on a deal in which the employees are on 1099 contract. However, when the employment lawyer reviewed the details, he mentioned that these employees should be on W2 because of the level of control the business has on the employers. Looking for some guidance on how people navigate employment for 1099 workers.