Bank Maze: Big, Small, Non-Bank - HELP!

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Follow and Subscribe on YouTube: https://www.youtube.com/@BizBuyersAlly

Deb’s Website: https://www.debcurtis.com/

Richard’s Website: https://richardparker.com/

#SBA #BuyAndBuild #BusinessBuyers

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welcome to headbands and handkerchiefs where business buying banter meets no BS

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reality get ready to dive into the world of buying and selling businesses without the fluff and fancy jargon we cut

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through the BS to bring you raw unfiltered insights from industry experts seasoned entrepreneurs and no

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holds bar discussions they get straight to the point whether you're a seasoned

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business buying Pro or a curious inspiring entrepreneur this is where the

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real talk happens buckle up for headbands and handkerchiefs because in

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business there's no room for sugar pooing let's get down to the Brass

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tags hey hey hey good day good day hello there Deb how you doing Happy

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year for you and yours it's going to be yes that we're just getting started and uh I know many

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well you know as in I would say listing listings that are qualified

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and maybe a better interest rate Market but if the business that's qualified can

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afford today's cost to Capital that's not a bad business in my opinion yeah

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and and you know we've talked about it before I I think people over engineer the interest rates just my perspective

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meaning yeah they're high right and they're higher than they have been they're when you look back over 25 30 40

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years we went through a period of you know zero interest rates or very low interest rates that's the outlier having

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interest rates five six 7% That's the norm yeah that said it still becomes an

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increased cost of capital so it's an adjustment of thinking you could sit by the sideline and say you know what I'm not getting into it the interest rates

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are too high too much uncertainty and that's those are the people that'll always sit by the sidelines so you have

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to go through the exercise and see how much more it's going to cost you you know you I don't think you compare it

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let me rephrase that not how much more it's going to cost you here's how much it's going to cost me based on current interest rates and how do we figure out

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a way to work our work around this in deal terms Etc because this is this is

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what they are we don't know if they're going down we don't know if they're going up but if you want to be an entrepreneur you have to embrace the

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uncertainty sometimes not do anything Reckless but you have to March forward and say okay how do I make this work

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that's it I mean it's if not you if not you know go work for somebody there you go and and I think about the baby boomer

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businesses that are for sale they've been around 15 20 25 years I think

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they've been through a few markets of highs and lows right yeah absolutely and

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and Good Times always lasts longer than bad times so this is temporary we don't know how long it's last people how long

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it will last people a lot of people flip out when it comes to uncertainty I get that but you know downtimes in the

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economy are always much shorter than growth periods and Good Times yeah and

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you know today we're talking about different banks you know the big Banks the small Banks Regional Banks non-banks

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Community Banks you know they they they all have different um I guess different structures and

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we'll walk through that on what the process looks like um different rate environments too with some banks and for

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the majority of sba7a loans which is the popular tool to

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finance business Acquisitions the popular credit facility is the

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sba7a most banks offer variable rates on

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those loans because they sell off the guaranteed portion to the secondary

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market and therefore the rates are variable which based on today's Wall

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Street Journal prime plus the spread you're looking at 11 11 and a half percent or so if you want to buy a

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business right but then there's the big Banks I think back to when I worked for

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Wells Fargo um they did offer on good credit deals fixed rates and they these

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were the deal that they wanted to keep the liability the loan on the balance sheet so they could offer the lower

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interest rate right and now when you have the ones that they sell off are typically the ones with the with the um

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with the variable rate is that what you're saying yeah yeah and how does it how do you find you know so an

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individual is looking to acquire a business it's a big step for them they've gone through the exercise done

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their due diligence they're satisfied with you know they're they're going to complete the transaction in their mind

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um everything is it points towards um it being a good acquisition so that part of

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the process they're they're they're they're all good with because this is you know it's it's an important decision for people and how do you find it

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because the SBA will off also offer some fixed rates right yeah when when interest rates are rising and we don't

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know where they're going to be or they're they're higher than they were you know a year two years three years

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ago right what do you find is there any specific breakdown between those uh bers that opt for variable rates because it

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has an element of uncertainty right you if if you look at all the economists I guess in the aggregate they'll tell you

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that they're eventually going to go down nobody knows when but you know for people that are taking a um or making an

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investment it adds a layer of risk to them if they go the variable rate route

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and yeah you see any breakdown what percentage of bar and I'm looking at this at the you know the lower end of

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the market typical SBA type deal deals I I love your thought process

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behind this question because I think back to when I was working as a direct

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even had a prime of zero for a period of time right yeah so to buy a

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business at you know three% I mean 2.75% were some of these interest rates when

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people initially purchased Finance a business that's all warm and fuzzy and feels great and there were some large

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transactions that were on variable rates Richard where where buyers were

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acquiring four to five million dollar businesses SBA 7A on a variable rate at

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3% so guess what happened two years later why would they do that so and the

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crazy thing is Richard there were decision makers in some of these loan shops that just swung on those deals and

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and yes we're thinking in our heads well the rates will go up I'm thinking back then well they're going to go

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up I didn't think they would go up as fast as they went up because I mean didn't your heart race a little bit in

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2022 into into 23 where it just kept going up and up and up how do you think

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those buyers feel now from a two two and

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three4 interest rate to 11 and a half today on a four to5 million purchase

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well you feel pretty stupid but you know when you look at it if you take a step back and look at try to look at it objectively when you lock into a 2.75

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rate or even three or four I mean you're just you're just buying into the E Euphoria and not being prudent when

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you're looking and say hey I I think people should look at some of this I'm not going to tell people that they

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should go down the road of a variable rate or a fixed rate you know however

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and and it's when the interest rates are low I think you have to have your head examined to not lock into a fixed rate

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because you know what the business could afford if you and the argument could be made that when the interest rates are

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very high well you should lock into a variable rate because they have to come down they don't have to come down they may come down it it's more likely I

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guess that they will but who knows the probability economists are wrong all the time who knows what can be around the

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corner what could change things and so what what I think people need to do is just for the sake of if there's not a

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big buffer between The Debt Service that a business can afford and an increase I think they look at I think people should

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look at and say okay if I'm very comfortable at the interest rate now and

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what the business can afford assume all things remain status quo again I'm just looking from my personal perspective I

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would lock into a fixed rate and knowing the business can afford it because imagine the scenario where the your

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invariable rate the rates go up and the business declines now you're really up a

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shits Creek right without a paddle well right and and I'm just because I I

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lived in this environment working at these banks that offered variable rates most big Banks would not swing on a four

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to five million intangible asset business acquisition loan even with the

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SBA guarantee at 3% they wouldn't swing so the the the

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only places you could really get a fixed rate Richard were at the big Banks the the banks that hold the receivable hold

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the note most of them most of those transactions that I call were financing

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Blue Sky financing air right we're just financing

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uncollateralized the name of the company you know there's no hard collateral you're you're financing the employees of

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the business that's not hard collateral right they were variable rates Richard there was there was no other option

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there was no option right and Banks do a stress test they'll add 2% to whatever

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the current rate is on top of it to just give a buffer but 2% is peanuts compared

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to how fast we went up from zero to what is prime today I don't know eight and a half eight and three4 something like

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that yeah Wall Street Journal Prime today is eight and a half there you go and I remember as a kid I mean I don't mean to age myself although it's

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impossible not to but when I started my first job when

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1981 and I was living in Canada the interest rates went to like 20% yeah I

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remember that you know you my dad when he I remember him telling me his first home loan our mortgage when I was a

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little girl he paid 19% and you thought that was a good rate back then that was

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like the the crazy right my parents more my parents mortgage payment was $87 a

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cost him the uh the general contractor told him it's an extra $300 my mother

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couldn't sleep for three days ah yeah today you got to add a couple zeros to that $87 you can't buy the nails yeah oh

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yeah 80s yeah you got to add zeros right so but it shows you that we go through the economy there's no predicting it and

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so you know if you can't if if if you have the um one option that does exist

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for people although it's not ideal and you don't want to count on this by any means if you buy a business and you

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choose a variable rate and your low rate and it starts to really Skyrocket if the business bus is performing very well

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while there may be some um penalties to get out of it you can you can look at recapitalization of the loan yeah

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however if if the market if the rates are going up like crazy and you want to rec uh recapitalize It generally the

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economy is you know has to be um the econom is in a little bit of a flux and so may be more uh difficult however it's

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something it is a potential option but you can't think about that at the beginning you've got to make sure that you can service the debt because if you

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have what we talked about earlier that situation where your variable loan the rates go up and the business declines

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then you know then that Gap becomes really large right right and so let me ask you something when you're talking to

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individuals buying two three five up to a $5 million do business or even in the lower Market half a million dollars they

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there's options between when someone's dealing with someone like yourself there are options where they go to there's a

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larger Banks there's the Community Banks Etc like are is there any ad um Advantage dealing with a smaller bank at

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a certain deal size or larger banks at another deal size like how do you guide people and is it tied in it all to deal

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size wow there is no one siiz fits-all with any of the bank sizes to match any

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of the deal sizes and as soon as you think you got it figure it out Richard It's Gonna Change again that's the story

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of my corporate career as an lender of course um when when I worked for the big

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Bank the whole process was different there were layers and layers that your file had to go through processing

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underwriting you know supervisors the onion was a lot of layers to peel back

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to get to a credit decision but if it was a really sweet deal and solid you you might get it yourself a fixed rate

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but it might take you six months from start to funding to get that deal and I had buyers back then that were solid and

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they were fine they'll they'll wait to get a fixed rate but you had to be gold

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gold okay and then we know you go to the the middle the middle siiz

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Banks the regional Banks um they're may they may be a little bit different they don't have all those layers and layers

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right this may be a boardroom decision where you bring your 25 page um credit

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memo of your spreads and you present it to a couple of of board members to get

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their yays enough yays to get the deal to go through that's a whole different process then you got the non-bank

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lenders they tend to move a little bit faster because they they are all variable rates and they don't offer good

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interest rates but in some cases some people need to move fast if they want to get that golden gem business the rate

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isn't an issue speed to funding is so there's no hard answer to that Richard

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it's that's why I believe what you're seeing today what we were talking about

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just backstage a lot of direct SBA lenders are stepping out of working in

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one sandbox to be able to play in several sandboxes for their clients

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right right right and be able to so they they could look for um alternate options for them yes yeah and and do you find

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you know what I'm hearing is across the board you know there's some activity that's down on the lower end of the

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market in businesses for sale clearly the The Leverage that's being um offered

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on the larger deals has declined significantly I think we talked about that last week you know Le from you know

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from three to four times to one to two times the SBA programs have not changed I mean it still offers unbelievable

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leverage to people but I do see and or hear you know activity is down and I'm

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not sure if that's a result of you know people's concerns I mean I mean we're hearing about a recession forever already which it's it still hasn't

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materialized and I'm not sure the textbook definition um applies you know to Main Street

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USA it's people just have less to buy groceries and put gas in their car that's you know they think they're in a

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recession and they're probably right because it's impacts them and so and de

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when with deals taking longer I know for where I sit whether I'm assisting buyers or or sellers deals are have been taking

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longer over the last year year and a half how do you deal with you have a buyer they find a business sellers on

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board and then you have um either Brokers or the seller themselves that

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realize oh no you know oh no this is going to take 90 days to get this financing into place so part of it is

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people have to start early but is there a is is there a different lag time L is taking longer to get deals from your

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perspective to the Finish Line as far as the financing is concerned once they've generally accepted um you know the buyer

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when I say accepted the lender has generally accepted the buyer yeah well

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I'm going to answer that and tie it into this great comment that Ron Douglas put up on on board here kind of goes into it

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glasses so I can uh Ron our good friend Ron talks about how he believes it's

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more about who you're working with at the bank and you got to find a cheerleader who goes to bat for your

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project That's Where It's At know a knowledgeable

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frontend SBA lender or an SBA loan consultant who sources the right project

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for you that's what I do that's going to be the cheerleader

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giving the orders to the business buyer and the business seller and the business

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broker of what needs to be done out of the gates before it's submitted to the

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underwriter once it's submitted to the underwriter and approved another list of what needs to be done and it just keep

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checking off those lists and if if all the parties listen and they're

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prepared sorry I love it that we need we needed CA to have her soundboard and put some laugh

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on that one we just got the natural laugh from Richard that is so true when they're all on board all the parties if

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all the parties listen yeah that's so freaking hard what kind of crack do they smoke where you're in Wisconsin can I

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tell you Richard I have clients that engage me and I tell them what to do and I'm you know I can be pretty Stern but

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at the same time I'm positively persistent that's the better way that I put it but the ones that don't listen

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things go backwards because they took advice from somebody that's not the experienced SBA lender and they didn't

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Circle back with me to say hey Deb the broker said to do this well if I would

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have known that I would have said you're you're you're slowing down you're getting in your own way you're gonna

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slow your transaction down like landlord requirements we talked about that right yeah I mean people other people that

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aren't the lender will tell the buyers what to do and then everything gets all

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effed up I'm I hate to say it it just is what it is and you know what it it happens on on all points of the deal

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starting from you know on both sides you know broker meets with a seller ends up getting an engagement they start talking

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about when I have a seller engagement I go through their um their team members immediately who their accountant is who

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their attorney is I would say in better than 90% of the cases they're not the right attorney and they're not a right

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they're certainly not the right attorney often they are to write accountant because the financials are just the preparation of financials but it's like

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you have who's you have we're going to talk about attorneys and they say oh I got an attorney already it's my you know and you find out it's their

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brother-in-law the patent attorney and say like that has nothing to do with the transaction we got to find you a proper attorney yeah but on the buyer side also

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everybody's in their ear we talked about it be before the show a little bit they have all these people in their ear and it goes goes back to the root cause of

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why so many people fail is they they they forget to attach themselves to believable parties right you're making a

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massive decision here you're buying a business if you go through it the in the right way you end up with a good business that's right for you and you'll

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do well but along the road who your accountant is who your attorney is who's your who your lender is um any any

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Consultants that you may bring in go to believable parties you know your your sister-in-law is not the right

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individual to be guiding you unless she's a transactional attorney or has a lot of experience or whomever friends

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family everybody means well but they're all in buyer ears they're all in sellers ears and

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learning to distinguish about you know experts from naysayers or experts from

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people who just mean well but they have no um they have no credibility related to to the deal so they shouldn't even be

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you know commenting yet buyers and sellers are listening or they run around the internet got a bunch of information or you know misinformation

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or inaccurate or out ofd information especially as it relates to you know uh SBA lending and and the and the the U

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the criteria that's uh required and then they come completely misinformed and you can't tell them otherwise so they you

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know buyers and sellers have to learn to go they've got to deal with the pros in the industry that's right my philosophy

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is if you're a business buyer and you need Capital to fund that seller the one

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you should be listening to is the one delivering the capital working to get the cash for you not all of the other

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like you said people in their ears talking about it should be this way it should be that way I'd like to Circle

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back to the topic of of our time here you know the size of the different banks because I I see a lot of comments in

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regards is it better to go big is it better to go small and it and and it really goes back to what Ron Douglas

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said it just depends upon who who is your who is your consultant your SBA

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lender that's the key because you could call a big bank and when I worked at a big Bank there were some darn great SBA

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lenders that knew stuff inside and out but then big Banks tend to hire I should

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say all banks tend to hire just anybody to get sales in the door and bring in any kind of a deal and then we've got

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inexperienced SBA lenders telling buyers oh yeah we can do that and and it smuck

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Schmucks up the system I think about you know you want to buy a business you walk into your regular bank that you just do

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your personal banking ad and you tell the teller hey I want to talk to somebody that does SBA because I want to

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buy a business well they'll sayoh yeah we can do that and then they pass you to a personal banker you sit down with a

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personal banker oh yeah we can do that but let me get in touch get you in touch with the SBA lender who covers six other

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branch locations good luck if they're going to call you back yeah right I mean

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every bank is a different box of crayons

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that's all I it's the best way I can put it no it's correct and that's why you know getting with the right people and I

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think it leads you know Raquel had a question said is getting a second third fourth opinion a good idea will that

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lead to confusion I mean my my feeling is you want to have surround yourself with the best team possible but opinions

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are like buttcracks you know like everybody's got one and so you know when getting second third fourth find the

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best expert possible and people also have when it comes to lenders what I found over the years the buyers have a

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misconception about banks with this idea that they're going to walk into the bank they're buying a business has no assets

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and they have no and as a buyer they have no track record they may have a little bit of capital but they think that the banks are just going to you

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know teller is going to walk them to the Vault open it up and say grab whatever you need and go buy a business and it's not like that at all it's very

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restrictive it's only when you start getting into the much larger deals that you're able to get you know non you get

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commercial lending it doesn't happen at the at the smaller and and so you know and to to Ron's question that he posed

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or point that he mentioned about having experts and racky's point is get the best people possible on your team I mean

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you should be spending a good amount of time vetting those individuals whether it's advisers Consultants someone such

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as yourself you know an SBA loan consultant I mean that's the way you want to go because they're the the

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reason why someone is an expert yeah because they've been doing it for a while oh Lord thank you you just that's

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been my career and I went through hell and high water I made stupid mistakes as a young SBA lender and that's how I

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learned and you know if there's one thing I want the listeners to take away today as a business buyer you should not

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try to swim in the waters of finding the right SBA lender to take on your

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transaction call me because I and I'm not I'm just saying this because every

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transaction every listing every buyer they're different puzzle pieces they're

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different Industries there's different cash flows there's different weaknesses there's different strengths every Bank

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likes this some banks don't like that and here's the deal when I call my bank

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lenders the the the short list of the top ones that I know that are lending today and yes that could change next

24:33

week because there's complete underwriting team turnovers where all of a sudden turn times are you know in the

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bucket and it's going to take you 30 days before you get a credit decision I know where to go and when I call A

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lender they pick up the phone immediately because they know what file I have in my hand is viable and going to

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be a transaction whether their Bank likes it or not and if the bank doesn't like it they're going to tell me right

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away so I can call the next three banks on my list to see what kind of appetite they have and it's crazy new sbop

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policies came out some banks want nothing to do with it other banks are okay with it business buyers and

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business brokers aren't going to know all of that and they're pegging themselves into just dealing with one

25:22

lender I'm telling you over the years business buyers that were told no

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probably could have owned a business for the last two to three years because I would have found somebody that would

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have said yes and that's why I got out of playing in one sandbox so I could

25:40

play in everybody's sandbox to help my clients find the funding okay yeah I mean it's really it's it's actually

25:47

quite unfortunate that the buyers don't have the um they don't have the exposure to the information and so they're

25:53

looking at a particular business they may be dealing with a broker or not broker has a favorable lender said we

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can't get it qualified or you don't qualify and they think that's the end of it and around the corner there's someone who potentially could so it's it really

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is you know it it lends itself to so many other points related to the business buying process which is the

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buyer has to take control of the process now that doesn't mean you know of course they've got to bring the right

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professionals as we've talked about to ad nauseum but they have to take control of the process because if they leave it

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incumbent upon the seller to dictate for example here's the asking price well the asking price has nothing to do with the purchase price so if they leave that you

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know and they and they don't how to do a proper valuation or the broker says they're not going to do any component of

26:36

you know an earnout or here's the one lender you know we can go see them but you're not approved if they they keep allowing everybody else to dictate their

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their future then you're actually undoing the whole idea of why you're going into business on for yourself

26:50

because you want to control your own destiny now of course they're misinformed but you got to get with the right people if not it's very easy to

26:57

run run there's a great old proverb says what's the use in running if you're running down the wrong road right on and

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that's what happens is if you don't get with the right experts in every component of this transaction and there's only a handful that you need

27:10

it's very easy to not get to the Finish Line it's Pro and that's a a big reason

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why so many don't that's right and I loved your words earlier in in this last

27:22

reply you got to drive your own bus I I I just put out a a a LinkedIn newsletter

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and I actually have a picture of somebody driving a bus because that was my analogy you have to drive your own

27:35

bus because others are gonna want to grab the wheel and steer it for you real quickly real quick yes yeah I see Pat

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someone put up here one of our uh wonderful Folks at the back end said Pat has a good question that she'd like to

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ask feel free to uh to post it racky or CIA whoever you'd like and happy to

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address it it's up there what do we got here yeah I'll read it and you and you answer I haven't read it yet any fears

28:02

of capital crunch for small Regional banks in regards to a potential banking

28:08

crisis yeah well someone mentioned that related also to SVP right yeah yep

28:14

that's right um well we didn't that would cause a little bit of alarm I had a client on the west coast that was the

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actually crap in the bed after that thought the world was collapsing and um it it didn't happen cuz that debt was

28:27

bought over the accounts were taken over I I don't think any of that those in

28:32

those those events I don't think help things but they don't usually trickle down quickly the the lower Market is

28:38

generally affected at a slower Pace than the upper Market in in business so for

28:44

example when multiples are shrinking at the higher end it takes a little longer for the lower end to be impacted when deals are getting tougher to finance at

28:51

the higher end it gets a little bit um more difficult it it it happens at the lower end but it just takes time to it

28:57

trickles down there's there is a credit I think what's happening or what I've seen is that the lenders are just being

29:06

more cautious they're doing more diligence they're um The Leverage has shrunk enormously we talked about it a

29:13

bunch of times Pat where leverage was you know three to four times iub before and now it's one to two on the larger

29:19

deals where it hasn't shrunk is with SBA lending I mean you could still leverage

29:24

9 to1 sometimes get 100% Leverage and so that leverage at the lower Market with

29:29

SBA is it's more attractive in those loans than any other um segment right

29:35

now and so I I haven't seen the credit crunch really impact um or really seen

29:42

the credit crunch interest rates of course are playing playing its role but I that the it's not so much of a credit

29:47

crunch it's people's uncertainty it's rising interest rates it's difficulty with putting valuations together as a

29:53

result of people coming out of the pandemic and not having a string of three Years yet to show any type of

29:59

consistency so I think that's where that's what's causing the you know the gears to grind a little bit yeah and I

30:05

would like to add just based on what I know some of the smaller Banks Richard that really swung on those unsecured

30:13

30:19

your rate on your loan was 3% well now those same buyers two years later are

30:25

sitting in 11 11 and half percent so uh what has happened a lot of the uh

30:31

smaller banks that keep the unsecured portion of the SBA loan on their books

30:38

some Industries some businesses the larger ones starting to see some

30:44

portfolio bleed so to speak where businesses are falling behind on making

30:49

those payments and what will happen uh and another reason why you want to work

30:55

with a business acquisition Loan Consultant is some banks will say no to certain industries because they have too

31:01

many um loans on the books in that industry segment and they're showing some bleed and this can even happen with

31:09

franchise franchise or a certain franchise or may be starting to show some kind of a bubble as far as

31:15

delinquencies and such so that bank will shut down saying nope we don't want to take on any new loan requests but I may

31:23

know some other Banks over here that will be like oh no fine with that because they don't have exposure of that

31:30

industry in their portfolio it's crazy it's it's es flows and Es and flows

31:36

right yeah well it's it's I don't think it's necessarily crazy I think it really points to the fact that people need to

31:42

have the optionality of knowing that there's it's not one size fits all and

31:47

they've got to go somewhere where they're going to be able to fit their situation and Mar you know match that

31:53

with the right lender there you go and and and again and that's why they have you Deb thank and your immense Talent

32:01

well it's years of a lot of Blood Sweat and Tears but even business BR even

32:07

business brokers if they're on the call I want them to understand don't pigeon to yourself into just your favorite one

32:13

or two SBA lending partners because you get paid a referral fee for sending the buyer to that Banker that B that bank

32:21

may say no and I've seen that where business brokers um were losing deals

32:27

because the bank said no and then they called me well no one else is going to get it done but Deb you can see what you

32:33

can do and then I found a way to get the deal done don't pigeon don't pigeon to

32:38

yourself into one lender just because you want more incentive what's the the

32:44

ticket is to sell the business of course the commission is much higher there I mean you you it's a bonus you're going

32:50

to get one or two% and that's wonderful but you got to have your head examined to be focused on that the goal is to get

32:55

the buyer the money at terms and conditions that the buyers are comfortable with in order for that buyer to get to the finish line so you know

33:03

they'd be far better served where there actually wasn't um fees coming back to them in my

33:10

view because then it would force them to either you know allow the well they they're not disallowing the buyer but

33:16

would force the the buyers to to seek out um all the the best options possible

33:21

yeah you know advice to business brokers and I've been you know doing brokerage for decades is forget about the fees I I

33:27

mean as a matter of fact I remember it was a number of years ago I didn't even know that there fees back because a while they took away the fees when I was

33:33

early in my career I never took fees on I'm not trying to present myself as a holier than thou individual but I never

33:38

took you know because I'm not but I I didn't take fees from lenders yeah

33:44

because I didn't want my buyer or my buyer or the buyer in the deal thinking I'm I'm I'm pushing them towards any

33:50

particular scenario because I'm getting a a piece of it I just think I just think it's wrong but again that's that's

33:56

strictly my that's that's my perspective um if that's not necessar shared with everyone but I think the larger point is

34:02

the fact that if you're a broker and you have a couple of preferred lenders if that doesn't get the buyer the money

34:09

fast then you're doing them a disservice not allowing them to go out and or or or showing them other uh potential um

34:17

lending facilities I just think it's ludicrous that's right and and some some banks won't give working capital others

34:24

will I mean it's it's crazy I think um CA mentioned there's another question to

34:29

put up on the board and and then we'll wrap up the show here uh I'll read the question here uh from Patrick our good

34:36

buddy Patrick do we worry about baby boomers moving to money market accounts and out of higher

34:43

risk unsecured or less Catal collateral and tightening or is the M2 velocity

34:50

allowing for Capital to still rush into deals what are your thoughts on that I

34:56

don't know what what he referring to by M2 um M2 it sounds like a car but so

35:02

Patrick maybe you can clarify I you know I I understand what you're saying about baby bar um uh Boomers moving money um

35:10

out of higher risk unsecured collateral I mean you you I'm not an expert in the financial

35:16

markets so anything that I've read seems to be the money supply there there's I

35:23

don't see I don't see that happening at the lower end where we're talking um there's still plenty of capital

35:30

available when you move up to the and again we're talking about Capital related to the merger and acquisition

35:38

World Middle Market yeah Middle Market and especially when you have the private Equity players and they've they there's

35:43

gobs of dry powder that has to be deployed they've got to spend money and so I don't think the you know I don't

35:49

see this happening where I play I mean there may be someone else who's um more

35:55

uh more uh has more expertise or more experience in some of the markets that you're talking about but I know at the

36:01

lower Market when I talk lower Market I you know ideal in businesses that'll sell for up to you know the way highight

36:07

is 50 million probably 20 million but sweet spot you know two and a half to seven and a half million where I work as an intermediary and I don't see that

36:14

crunch I see it just taking longer um The Leverage is lower um but you know

36:19

and and Baby Boomers may be getting more conscious uh uh cons diligence in their

36:25

investment but I just I don't see it to that extent I just don't see you know again it's uh but that's in the market

36:30

where I play oh I'm glad you answered that I'm Patrick I'm more in the smaller business segment anywhere from a

36:37

business selling for 500,000 up to 5 million um so that's a little

36:43

bit it's different how you value those businesses right Richard the small ones

36:49

compared to the Middle Market ones yeah of course and that's where there's a lot of confusion people try to value a small

36:55

business based on the temp tempates of the Middle Market companies and vice versa and there's just too much

37:00

confusion out there too much confusion and there's also you know people are reading you know um they're reading

37:05

information online or or Publications or seeing what public businesses publicly traded businesses transact at or a

37:12

market gets very hot and it happens all the time certain sectors get hot and all of a sudden the multiples start to

37:17

explode and it generally does not happen in the lower Market um just because people have to get a good return on

37:23

their investment and it's more meaningful people are buying businesses to generate or replace an income and so

37:29

you know we there are the process of buying a business is actually very

37:35

similar regardless of the size business but some of the fundamentals and the deal structures change dramatically

37:40

between you know the lower market and and and the higher Market um Deb I know that she posted something about the

37:46

special report so we done that yeah you want to put it back up seea and you can speak to that Richard yeah I think

37:53

anybody who's considering buying a business or wants to understand what what the landscape looks like this is a

37:59

report that I did and Deb um weighed in significantly on the financing uh portion of the of the report it's about

38:05

40 pages it's it's a terrific document to help you get some a very good

38:11

understanding about items that a seller will not readily disclose doesn't mean they're doing anything fraudulent or

38:16

lying to you but it's just information that you have to explore and uncover

38:22

often times on your own to get to the bottom of you know the root cause of things and so it's really a good read it

38:29

and it's put together based on you know Decades of of dealing with buyers and sellers and so i' um highly advise

38:35

anyone to you know take the time to read through it because you're going to find it informative thank you for that and as

38:42

always we we are here every Thursday streaming live on all the social channels um at 2 pm Eastern so just mark

38:50

your calendar and show up and you'll you'll find us live um any closing thoughts for today oh yeah our sponsors

38:58

well let's put them up uh let's thank our sponsors today um brilliant beam media is our production uh sponsor and

39:06

for those of you business owners out there if you're looking for any kind of help when it comes to social media

39:13

presence electronically video wise test test text wise all of that stuff uh scan

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that QR code uh CA and her team are phenomenal and they

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you into aace that's tot your for electronic presence and then we have

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another sponsor I'm I'm going to be surprised what who is Cia gonna put up for us

39:39

today Walking Tall Walking Tall movement um two gentlemen and a I believe a

39:46

doctor if I recall um they all work together in regards to supporting mental health awareness two of the guys that

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are the front of walking Paul are victims of massive shootings and um if

40:01

anybody has been through mental health that that would be who they are and I

40:06

always say those who have walked through the fire are qualified right Richard that's just Amen to that yes yeah I mean

40:13

we've all walked through the fire of some sort and and I I believe that's what what makes us business owners

40:19

because we find solutions for those fires yeah it's a good analogy because we're firefighters right yeah we make

40:26

transition to stop putting out fires every day yeah we're firefighters yeah and then uh Raquel um she is also

40:33

another show sponsor of ours and she has the Raquel connections quarter Corner

40:40

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her QR code and show up up to her live show every Saturday morning at 10: a.m.

41:00

Central Standard Time Raquel has a wonderful following it's growing every

41:06

day you really need to get yourself injected into her Corner every Saturday morning because you will meet some

41:13

Fascinating People that she puts in front on of the stage on her live and then and she is and she is the just a a

41:22

like she's like a bottle of champagne just bubbly her part personality is unbelievable she's so positive and I was

41:29

telling you earlier like it's so nice she weighs in you know in such a meaningful way on people's posts and

41:34

commentary I mean just wonderful wonderful human yeah she's very interested too in in everybody's small

41:42

business and what they do she's always wanting to learn and I and I believe when we all are like that we want to

41:47

learn about each other we pay it forward and that's what brings us to the hounds business Community we'll put them up as

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42:55

and also in another Channel called Mighty networks that's how you network I

43:01

don't have to pay $100 and fill up my gas tank to go drive to a networking

43:07

event and spend an hour in the car to get there and an hour to get home we just Network every day like this live on

43:14

on Zoom how cool is that yeah and it's and it's a very good point when you talk about networking because people maybe we

43:20

should have do a show one day on it because it's so easy for people to get trapped in ongoing never ending

43:26

networking that leads nowhere oh I know right on and you know you know what

43:32

Richard I bet you Mike would love to get you on a hounds of uh business Community show he does an evening show to talk

43:38

about what you do as well I'll I'll try to pick up a camouflage hat so I could be a proper participant yes well thank

43:46

you Deb you're thank you and it's always a pleasure I feel right in the pocket when I'm live with Richard you just you

43:53

are a ray of sunshine I enjoy your company well thank you God bless you you know I live for you you're always you're

43:59

always positive and encouraging and a wealth of information and uh hopefully

44:05

the people that can use your services take advantage of it because they're going to be uh you know they're going to

44:10

be put in the right in the right position having you on their side so again I I appreciate your comments but

44:16

it's right back at you and I look forward to uh chatting again next week next week yeah so ladies and gentlemen

44:23

enjoy the rest of uh the first week of 24 and uh join us next week Thursday

44:29

Live 2 pm Eastern see you see you see you bye

44:35

[Music]

44:42

Deb