Shownotes
Your Personal Financial Statement – Assembling this Key Document
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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/
Transcripts
0:03
welcome where business buying banter meets no BS reality get ready to dive
0:08
into the world of buying and selling businesses without the fluff and fancy jargon whether you're a seasoned
0:15
business buying Pro or a curious aspiring entrepreneur this is where the
0:20
real talk happens because in business there's no room for sugarcoating let's
0:26
get down to the Brass tax
0:33
haa we are live Richard hello there how are you where business buying banter
0:39
meets no BS reality okay here we go how you doing I great I I get excited for
0:47
Thursdays and I get the whole week so to speak to think about our next episode
0:52
and what the topic is going to be so I try to Rack my brain around the past to
0:58
to come up with some good stuff stories cuz stories are good stories are good but boy the week's fly by I don't know
1:04
about you it's like it seems like an hour goes by and it's Thursday again which is wonderful because we have a great time but holy smokes it goes fast
1:11
yeah I'm glad we do it on a Thursday because it kind of wraps up the week heading into Friday gotta have fun on Thursdays because why not every day got
1:19
have fun Monday to Friday Monday to Sunday every day is a fun day when it's in entrepreneurship through acquisition
1:25
whether you're selling or buying every day is a fun day Sunday Funday oh so today's topic ladies
1:34
and gentlemen who are joining us and if you're joining us if you can please put
1:40
in a comment uh in the comment section where you're joining us from whether it's our Youtube channel search fund.com
1:48
we are um posting this show live simultaneously on searcher.com
1:55
LinkedIn if you're watching us from LinkedIn give us a shout out in the comments and tell us where you're where
2:01
you're watching the show live from because we like to keep track because data is important right
2:07
Richard yes or you know or data is also important data data you know I always so
2:14
I was with a group and they kept calling data and I kept saying D they kept calling data and I kept saying data and
2:20
it's a very Canadian thing to say data and and I say data so you're in h Wisconsin which is close to Canada so
2:26
you're saying data so yes but either case the that's the data holds the answers always does that's right is it
2:33
tomato or tomato it's both although tomato I was doing a YouTube short uh
2:40
YouTube Instagram short and um I showed it to my son Jake 21 years old and it went a little long
2:47
and he said Dad people have the attention span of a tomato right don't go over a minute yeah
2:55
yeah so or a tomato one more will'll Barrow or will'll borrow
3:00
wheelbarrow my husband calls it a wheelbarrow and it drives me nuts that's only when you borrow it from somebody
3:07
I'm like where'd you get wheel borrow from because he probably borrowed it from the neighbor and didn't give it back there you go there you go all right
3:14
enough of the shenanigans but we'll get to more Shenanigans later so God all right yes let's talk about the personal
3:21
financial statement the SBA version perhaps um boy oh boy oh boy that form
3:31
is very important and every business buyer needs to take it seriously along
3:37
with your consultant your your um lender you want to make sure everything that
3:44
the statement is asking for is true and accurate and over the years my
3:50
experience is it's a pain in the dupa to fill out the personal financial
3:55
statement by what do you think Richard you the the ones that are
4:01
required by lenders are infinitely more comprehensive than the ones that a prospective buyer has to submit to a
4:07
broker or or a seller and and there's good reason for that because if it's being submitted to
4:14
the broker of course above all it's got to be accurate and true but the one they don't need to go into the details of
4:20
what can be um leveraged um you know or get into real granular details about the
4:26
financial statement it's it's it's high level but it's got to be accurate versus with a lender they want to know the
4:34
details and so you know I see it mostly from Another Side which is a critically
4:39
important document and we'll we talk about that perspective in a minute it's
4:44
a critically important document and people need to understand I think a couple things maybe you could
4:51
talk to this that a financial statement there could be more there than an
4:56
applicant actually submits and I know you do a lot of that type of work so I think it would be important for people
5:02
to understand how when you get one how you work on it with a buyer because it
5:07
may be better than they're showing and then I'm happy to weigh in on certain things that a a buyer needs to present
5:14
to a broker and seller because oftentimes I hear buyers saying I'm not sending them my financial statement
5:19
which is sort of bizarre because they're happy to send it to a lender and there's a whole different take on that related to a seller so when you get a personal
5:26
financial statement some of the things that you find are where what do you look for where can you Beef It Up accurately
5:32
of course yeah so when I have potential buyers
5:38
fill out the the SBA personal financial statement once we know that you're qualified and we're going to move to
5:45
searching yes the the business broker profile mini financial statement is just
5:52
that mini it's just talking about really liquid cash maybe assets equity and home
5:58
the overall SBA one is really diving into all of the details and um it is my
6:05
job to have conversation with the proposed buyer walking through that statement from top
6:12
to bottom and if your SBA lender is not there will be things that perhaps are
6:18
found that were in the closet and we didn't bring it up or we may miss
6:24
opportunity to find another eligible source of down payment to get your
6:29
transaction done so let's start with just the simple stuff Richard you know
6:35
when you're looking at the personal financial statement you want to list all of your personal deposits right your
6:41
checking your savings you want to list stocks bonds uh there's sections about
6:48
your vehicles and then you know there's the asset section and then there's a liability section and the liability
6:55
section is equally as important with accurate balances as to what is owed on some of
7:03
those assets right right yeah because you need because you need the net value
7:08
obviously yeah go ahead so what I have
7:13
found it's a CRA couple of crazy incidents over the years which seem to be pretty con it's pretty common I mean
7:21
it's get it from buyers one of the things is and again I'm not talking about Bank applications it's just to the
7:28
broker the seller and I've had several comments where they say well um I'm not
7:33
going to give them my financial statement and the rationale that we try
7:38
to provide back to them is hey you know you've signed this NDA which which is all wonderful you're requesting the
7:45
seller disclose everything about their business their financial statements tax returns
7:52
details answer all your questions they're entitled to know your financial
7:57
statement to make sure you you can get to the finish line and so any buyers who
8:03
are apprehensive now that of course a situation where someone doesn't have a robust financial statement they're
8:09
concerned about that and we can talk to that but there has to be a willingness to provide an exchange information with
8:16
the other side I mean you're not going to get if you're expecting the seller to
8:21
keep providing information and that is a an a reasonable request by the seller Andor their intermediary for your
8:27
information you have to provide it that's right that's right and on the
8:32
personal financial statement when when I review it with
8:37
Buyers there's a section for real estate and I don't know why but quite often if
8:44
it I don't know if it's intentional or just forgotten about or they don't want to tell the lender
8:51
they don't want to list all the real estate that they own including their primary residents yeah because they
8:57
don't want to collateralize it but they're going to find out yes so stop the baloney and be transparent out of
9:06
the gates with your consultant to discuss all of these Avenues before we
9:13
present it to the lender of course because because I know you don't want to use the
9:19
equity that's in your home however the SBA does allow you to
9:26
pull the equity out of your home if you want to use it toward the equity
9:32
injection required by the bank for the down payment on the on the loan project okay and that needs to be discussed
9:40
ahead of time like how are we going to get there is it going to meet sop guidelines let's talk about it now not
9:46
all the time will that be the case because some transactions are larger and they
9:53
may require the bank wants to take a subordinate lean on that available
9:59
Equity right so we have to kind of talk about it and if there's ever a question
10:05
which way do we go I'm going to contact my portal of top performing lenders to
10:12
say hey this is the transaction we have Richard has this much cash on hand but
10:18
not enough but you're funny but he also has equity in his home we're thinking you
10:26
know maybe pull some of the equity out of the home because yes secondary household income to cover the payment
10:31
even though that that's a new sop policy that went away but Banks still want secondary income but what I'm trying to
10:39
say is be transparent and open with it ahead of the gates out of the gates
10:45
because I'm going to help figure out a way how do we get that particular deal done on that specific business loan
10:52
project right and and there used to be a time where the SBA was required to go after collateral in the home primary
10:59
residents if there was more than 25% equity in the home and I don't know if that still continues but one of the
11:04
things that used to do to overcome that because I understand people's fear of putting up their house because it's not just you know it's not just the one you
11:11
know husband and wife partnership whatever the case may be two people own the home it's a you have to be in
11:18
concert with one another to make sure you're both comfortable if it comes to that from a traditional lender but when
11:23
they used to have that 25% requirement the the way around it was
11:29
you get a home equity line of credit that takes you below 25% Equity you take
11:35
the money out don't spend it put it in your bank account and then you um they
11:40
for they they they uh wave the requirement um to um collateralize the
11:46
loan with your home because there was less than 25% Equity irrespective of that or how you can if there is a
11:52
workaround and things change is understanding that there's um personal
11:57
guarantees associated with a third-party lender that their buyers are going to
12:03
have to put up the degree will change whether it's home what El whatever it may be but the you know part of this
12:09
personal financial statement and understanding when you are getting a third party loan is there's guarantees there's collateral there's security and
12:15
people have to get comfortable with that both parties mean when I say both party husband wife partnership whatever the case may be yeah because you you both
12:22
got to be on board and it could understand the trepidation so you know make sure it's something that you discuss with your spouse partner Etc
12:29
because it's going to surface listen you're bringing it right on home for me Richard and I love it because I have a
12:35
real story that I can share with our listeners I spoke to a fellow a oh gosh
12:41
this is probably over five years ago um he had a lot of equity in his home and
12:46
he was married and it was a transaction that I was very transparent upfront that
12:52
listen in order to get this whale deal done it was pushing 5 million you have
12:57
equity in your home and you have cash your best Chance is going to be the cash
13:03
is down the post closing liquidity is available and they're going to take a subordinate lean on the equity in your
13:08
home you need to talk to your wife he was married he had a spouse he tells me
13:14
she says yes that she's totally on board with the transaction sorry to laugh I
13:20
know where this is going so I'm like okay but I learned a
13:25
lesson here Richard I should have had her sign of course with him the SBA
13:32
personal financial statement now whether she signed it or not those are some more stories that we could talk about in the
13:37
future but I didn't I trusted him and you know we'll we'll get this personal
13:42
financial statement signed as we're moving along um he signed it she didn't
13:48
yet I didn't like that I was a young younger SBA lender and sure enough we
13:54
get the deal approved and as we're moving along she don't want to pledge lean on the home
13:59
hello the deal went backwards and he admitted he didn't tell me the truth out
14:04
of the gates because he thought he had enough time he figured he could work her I'm gonna work I'm gonna work the room
14:11
however that is gonna be well you see how did that work out for you right oh
14:16
jeez you know I had something similar where I was I was looking to acquire I was acquiring a business and um right
14:23
and um asked if there's any other partners involved with the business or anybody else partner said um one said
14:29
yes I've had it both ways where I didn't ask the question early on in my career I went way down the road and then found out there was another partner partner
14:34
involved and that end did the whole deal learned well from that experience but subsequent to that had also had a
14:40
situation where um they said there's a partner involved in the deal and um there's no problem there silent partner
14:46
I've a um I can sign for everything etc etc we have get into and having had this
14:51
experience had a couple of these conversations I said are they well aware that you would do oh absolutely and then I I only allowed it to go to one or uh
14:59
two other conversations and finally said to him um we need to get this other
15:05
person involved in the conversations and it was oh no no no problem I've got the mandate to sell the business I said okay
15:11
for just my own comfort and I presented them with a letter just you know it's a a resolution letter just saying that
15:17
they they mandated and they can represent them and sell sell the assets of the business in their name Etc and
15:24
couldn't get it signed oh man and But ultimately said well don't tell me that
15:30
you have the proxy to do this when you don't and and subsequently learned that
15:37
he had felt that once there was a an accepted deal in place the other partner
15:42
would be convinced to sell the business well that's wonderful that that's your thought process but don't waste people's
15:47
time in the interm much like yours got got wasted so you know ultimately transparency at every level with all the
15:54
stakeholders whatever is involved is the easiest way and you know what if there's a problem tell people people because if
15:59
you if at least you could deal with the problem when you know what the problem is but if you don't know what the problem is you can't deal with it so
16:06
boom just every you know hand hands above the table listen in SBA lending
16:12
when it comes to change of ownership transactions we fully anticipate curveballs they are coming oh absolutely
16:19
so just shoot them shoot them baby shoot them yeah shoot them at the beginning you might as well know early on yeah
16:25
we've also had on the other side and again I speak more from a standpoint of buyer to seller buyer to to broker with
16:32
these personal financial statements I've had it quite often where a buyer will
16:37
say well I don't want them to know exactly what I have because that's going to um influence their thinking related
16:45
to the deal terms and purchase price and this is coming from people have pretty substantial assets and the point has to
16:52
be made to them that their their thinking is flawed because the more financially sound you are the better
16:59
position you are in in the eyes of a broker and a seller to complete a
17:04
transaction just because you're worth X doesn't mean the business the price of the business is going up you pay what
17:11
you deem to be the value of the business that should never influence now if the seller and the broker if that influences
17:16
their thinking that's their problem but a buyer should never think that they're showing too much I mean if anything that
17:22
really really bolsters your cause because yes the cell side knows this in
17:28
the idual can get the deal done they have the capital or they have the you know they have the cap the financial
17:33
strength to be able to leverage that Capital so never be afraid to show a very very strong financial statement in
17:40
fact the stronger the better irrespective of whether it's an SBA loan a third party loan you know commercial
17:45
loan or or or a a balance of salale seller financing you want to put yourself in a good position yes and in
17:53
include it all I have another story of um good uh a fell a couple coup years
17:58
ago he and his partner they had to put up their home um for this business
18:04
acquisition had it on the personal financial statement reviewed everything
18:10
banks do searches right they're going to do searches so if you miss something on that personal financial statement
18:16
whether you're a buyer or you're the seller the bank is GNA find it for good reason course well we're getting ready
18:22
to clear closing conditions we're moving on we're getting ready to put the subordinate lean on the home taking look
18:28
at Title Insurance well there's a parcel next door to the primary residence a piece of land that the proposed buyer
18:36
also owns but did not put on the personal financial statement guess what
18:43
we had to take a lean on the land because it's known as real estate and it
18:48
had Equity it was free and clear he wasn't happy but can make everybody
18:54
happy he didn't disclose it so at the end of the day though we got through it and he he had to pledge it it's it's it
19:01
is what it is um yeah you know one of my first bosses guy named Saul Zuckerman who's a great guy he's wonderful guy
19:09
he's been a friend of mine all these years little older now terrific guy very very comical and we were talking not
19:14
long ago related to internet social media all these things and he comes and he's about 20 something years older than
19:21
I am so a different um different generation when he grew up but he said it best in his
19:28
like Street Smart way as far as all these documents and anything related to a deal and anything you do in business
19:35
said you can't get away with nothing and and and didn't mean it in a
19:41
Larsen way it's just you got to operate yeah transparently because there the information is available to anyone so
19:47
you're not going to hide land you're not going to hide another property everything is coming to the surface and and you know those type of things we're
19:54
talking about in the way of a a loan or financial statements but that bleeds into this whole business buying process
20:01
and the interaction between buyers and sellers and SE buyers and sellers and Brokers and lenders all the stakeholders
20:08
is you know you've you've got to be upfront with everything and if there's
20:13
surprises regardless of what those are Surprises with the financial Surprises with licensing finan Surprises with an
20:20
employee or customer concentration everything is going to come to the surface and if you don't disclose it if
20:26
sometimes there's an oversight but if you don't disclose something which is material and obvious and the other side
20:32
knows they these guys know about it they should have disclosed us you lose all credibility right so let's talk about
20:40
the liability section of the personal financial statement um debt and this is really
20:46
important for anyone out there that's thinking of buying a business and in
20:51
many of us have debt we have a mortgage or what have you pull out your most recent statements and disclose on your
20:58
personal financial statement what are those monthly payments and be accurate as possible because the bank underwriter
21:07
has to do what is called a global cash flow of the overall picture meaning not
21:14
just the Standalone business that you're acquiring debt service coverage but the
21:19
global what's the business debt service coverage and what is your personal household debt service coverage combine
21:26
the two and you've got Global if you're going to miss payments by one digit and
21:32
I've seen this on personal financial statements where they say this is their mortgage payment and they forgot one
21:38
extra digit in there we're gonna have issues yeah especially if it's the first
21:43
digit yes oh my goodness but it does happen
21:48
and I as a consultant have to take ownership Richard of reviewing that
21:55
statement top to bottom with my my clients the business buyers because
22:00
we're human we make mistakes it's a pain in the dup bot filling out that personal
22:06
financial statement listen I used to work for banks pass and I was a commercial loan portfolio manager and we
22:12
had to collect a updated personal financial statement every year first quarter it had to be in by January 31st
22:20
more business owners were ticked off I got to fill out this personal financial statement again and you know what some
22:27
of the lenders would do I saw it they would take the old one make a copy of it white out the
22:32
signature and tell them to sign and date it again with liquid paper with the same information I'm like people did your
22:39
debt go down did your debt go up oh no that's what they would do so
22:44
transparency please people yeah and the reality is I mean you of course people make mistakes but everybody everybody
22:50
knows how much the mortgage payment is I mean you know what your costs are and so just do it in the in the right way
22:57
there's it it's it's so much it it keeps being attached to this whole concept of
23:02
transparency through the process with all the parties you establish credibility by being upfront buyer
23:07
seller lender broker accountant attorney whoever is involved just being upfront because any issues you could you could
23:13
deal with the issues when they know what they are and and there's and and everything surfaces there anything that
23:19
anything that's hidden is going to come up and the longer into the process that it takes for something to surface the
23:26
more impactful it is in a negative way related to the whole deal and so you know on the personal financial statement
23:32
you know we have a lot of people from you know uh platform search fun that are um listening in listening on the shows
23:39
and you know I I read hundreds of comments on search funer and there are
23:45
some funded Searcher funded Searchers there are some advisor and intermediary but the vast number of people on you
23:52
know on on those type of platforms of people that never done this before no knowledge no expertise they're going into business they're looking for
23:57
Capital capit afterwards um often too late we could talk about that in a separate show but for them especially
24:03
when if they have no experience buying businesses and they're just you know they're graduate school um individuals
24:09
they may have good pedigree but there's no operational experience or no track record imagine when you when you sit in
24:14
front of a seller they're already behind the eightball because sellers know that they don't even have the Acumen potentially to operate the business or
24:20
at least have in demonstrative um operational experience so in those cases especially you got to be straight
24:27
upfront and let know what's happening and and and what your financial statement looks like just's no use
24:32
hiding it it's it's going to surface so going to surface save yourself a whole hell of a lot of time yes and provide
24:39
you know accurate information you know it one more story before we get to Q&A
24:44
um back to the asset side of the personal financial statement true story
24:50
I love I love good stories Richard um so buyers will list what their personal SA
24:57
savings balances they're checking money markets you know all the IRAs you want to list all your balances A good rule of
25:05
thumb even though a buyer said that's what's in their account you might want
25:10
to verify it out of the gates that's called fully vetting because I can
25:16
easily say I have this much money on a personal financial statement and if you ask me for a bank statement it's going
25:22
to tell you a different story true story this wasn't my deal it was a pure of
25:27
mine at a loan shop that I used to work for and it hit like wildfire like watch out ladies and gentlemen because here's
25:34
another new trend we got to watch out for the buyer listed on the personal financial statement that she had so much
25:42
money in cash liquidity meaning savings you can pull it out at any time I want
25:47
to say I think it was 880,000 she put in there uh as part of her down payment for
25:53
this loan project so the deal got submitted the front-end lenders like we got a deal they got enough cash
25:59
liquidity underwriting approved it got the commitment letter closing go moving
26:04
to clear all the closing conditions and the closer asks for the bank statements to prove the $80,000 cash
26:13
liquidity and the borrower is like well I don't have that and she said well you
26:18
list it on your personal financial statement you got $80,000 cash where is
26:23
it it's in my freezer perfect what's your
26:28
address who's the duper come on now listen that's that does happen though I
26:34
uh way back in the day I used to work with seniors doing reverse mortgages and they store money in the freezer you know
26:43
why you tell me why they like cold cash stop
26:49
it baboom that was a good one I liked it I like you walked right into it yeah so
26:55
anyhow guess what that that deal didn't close on time she was instructed please
27:01
move your cash in the freezer to the local bank and see now you see now you
27:07
could do a zoom call she could just count it out right right right on the table that's how we verify the cash yeah
27:13
I mean it's changed a lot you when I used to work my father in the renovation business and I think of how many times
27:18
years ago as a kid how many times we went to you know did a significant job at someone's house and you went in they
27:23
said give me five minut and they're big they were that point5 10 $15,000 jobs and they said you know we went in there
27:29
expecting to get a check from the bank and he'd come out and they would count off cash and it was cold I bet those cold yeah it was cold
27:38
yeah pretty cool yeah them were the days well you know people do put cash they
27:44
say under their mattresses and stuff so as an as a consultant I have to ask if
27:49
you say you've got this much cash show me your statements show me the money show me the money and if it's not in the
27:55
account where is it yeah get well at least she at least she had it right so
28:00
it wasn't like well I had it when I wrote the statement I don't have it anymore so least it wasn't collecting interest it was collecting freezer burn
28:06
is what collecting it's exactly what it's
28:12
collecting oh I think it's Q&A time put on my glasses to take a look at this
28:17
okay and thank you uh everyone that is listening from uh search funer YouTube
28:23
LinkedIn wherever you're from please do Richard and I a huge favor because our
28:29
channel is new business buying banter on YouTube hit that subscribe button like
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make a comment uh under the episode we love your feedback and the more we get
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support the more that our show gets pushed out to the Uncle Al known as algorithm okay algorithm yes Alor I was
28:49
think when you said Uncle Al I was thinking about I just read the biography of Al Capone which by the way was Lawrence bur green who wrote it 600 and
28:56
something pages hate to digress but I I would urge everybody to read it it's phenomenal it's phenomenal talks about
29:02
you know Chicago in the old days Big Al and discrimin discrimination against Italian Community which was unbelievable
29:09
and unbearable and the corruption in Chicago politics so I hate to digress but when you said Big Al because they
29:15
used to call him Big Al or the big fellow that's what I thought now back to back to business here we go well looks
29:21
like miss jod Lamb has a question for us hey jod how long can that process be
29:27
more or less only an eternity it just feel it just feels like an
29:32
eternity so the process I'm trying what would you think she's meaning the process I think from the time you submit
29:38
a personal financial statement or to the time or if you a business approved like how long is it to go through the whole
29:44
process with an SBA loan I'll assume that um you know from beginning to end because that's a you know pretty uh
29:50
common inquiry well I'll answer I'll I'll provide two answers here number one
29:56
an SBA personal financial statement cannot be older than 90 days old when
30:02
presented to the SBA underwriter so sometimes deals ladies and gentlemen get
30:07
stuck in the queue for whatever reason we don't have enough information from the seller side they weren't prepared or
30:14
the buyer side and that personal financial statement starts to collect
30:19
dust right and after 90 days that's going to be handed right back at you to
30:24
update the balances update you know your payments sign and date that's an SBA
30:29
policy so that will answer the process for that um document but as far as an
30:36
SBA loan from start to funding that can be up and down and all
30:42
around and left and right and wherever the heck it it may may go I can share
30:47
with you this I have funded deals where there were very organized sellers and buyers and Richard you know what
30:53
organize means where we can get the transaction done and funded within 30 to
30:58
45 days on the other hand lack of organization and a lot of back and forth
31:05
of retrieving stuff good Lord I've seen six months oh absolutely and what I tell
31:11
people is similar to that is if you get everything in on time and making the
31:17
assumption that you progress because there's two parallel tracks here there's the SBA doing the funding and the
31:23
underwriting the SBA the lender rather and there's also the buyer and seller negotiating getting their act together
31:29
and their deal together but assuming you get you know you work along a good track with the seller getting that
31:35
organization and you provide everything to the underwriter to the lender in a timely manner you have to think about
31:42
this as being 60 to 75 days that's what I've always said at the very least if you don't if you do that it it'll be on
31:50
the lower part if you don't it's anybody's guess when this thing is closing so my experience is the lenders
31:57
I mean sometimes they're pain in the ass but the lenders don't hesitate they want to get the money either loaned out or
32:03
the application declined so they will work as quick generally as the information that's provided to them
32:10
buyers and sellers and Brokers also need to understand that the first set of
32:15
documents required are not the last set of documents required because as an underwriter learns more about the
32:22
business and certain things for example something comes up that may be environmentally related or some
32:27
intellectual property that has a value there that is that is being acquired they can request additional information
32:34
and there's also business appraisal if there's property involved there's property appraisals so you've got to work quickly get the information and you
32:41
know one of these things it's a huge Advantage for the buyer as well because it forces the seller to provide
32:47
information that typically the buyer needs as well and when there's no thirdparty lender sometimes they're dragging their feet whereas in this case
32:54
hey Mr Mrs seller you want to get this thing done you got to provide this information similarly What A lender
33:01
requests of a buyer has to be provided expeditiously don't waste don't waste time because it's just going to add it's
33:06
just gonna add time to the end of how quickly you can get it closed man if Underwriters are listening right now
33:11
they are clicking that like button to this episode just based on what you said Richard click the love button the love
33:17
button the love button and and if your down payment is in the freezer your loan is going to take a hell of a lot longer
33:23
because that's got to get in the bank you know in season so on that question by the way if someone puts it into the bank their statements have to show it's
33:29
been in the bank for a certain period of time like a mortgage yes but it's not necessarily an SBA
33:37
policy anymore that it has to be seasoned 60 days but the banks with
33:42
regulations yes want it proven that it's seasoned 60 days because of money
33:47
laundering so um yeah there's been talk that the SOP doesn't require that
33:53
seasoning but the banks but the banks the banks you know the uh the SBA makes has the
33:59
guidelines but the banks make the rules right on got it what other delicious
34:04
questions do we have here if something gets missed Richard
34:10
does that look bad on you as a rep um not necessarily because let's let's
34:17
be real Raquel that things can get missed but if it's
34:23
repetitive the underwriters start going to start to question the character of the buyer or the
34:30
character of the seller or the character of the broker okay if if stuff starts
34:36
popping up missed I'll tell you what I'm not liking it I call it flags up the poll and once
34:43
I see too many of them I'm starting to want to head in a different direction what are your no I agree with you
34:50
wholeheartedly you just sometimes people make honest mistakes to forget something but if it's habitual it you just lose
34:56
cred ility that's what happens in all aspects of the deal conversations between buyer and seller Furnishing
35:02
information to lenders absolutely and certainly when someone gets in the middle and um you know when someone's in the middle such as yourself providing
35:08
guidance it happens too many times you start looking at everything with one eye closed so you you get very concerned so I agreed wholeheartedly I just see a
35:15
question here by the way go sorry go ahead yeah yeah but in all fairness um for those of you listening if you're
35:22
working with a rookie SBA lender that doesn't know what questions to ask and
35:28
and the deal gets just freaking pitch slapped into the underwriting cue and
35:34
now the underwriters is asking for this and asking for that because the front Ender frontend lender didn't ask for
35:39
this or that that's not on the borrower so to speak no of course not and that's why you have to you know having the
35:45
right parties and stakeholders stakeholders involved in advisors is is so important because people like you you'll catch that and it's and people
35:52
make mistakes it happens all the times it's not uh it's not intentional so you that's why you getting a second set of
35:58
eyes on everything is wonderful I mean look at us we couldn't find our link last week for the show and I still couldn't find this week's link the
36:04
second we get off the phone I can't find my keys for today so yeah so absolutely
36:10
and Mr I hear from Jamar I saw something from Jamar um someone said I can't
36:16
imagine um Jamar said most buyers have not um oh yeah here so many buyers have
36:22
never done this great topic that's from Jamar hey Jamar good to see you thanks for joining us and adding feedback but
36:29
yeah go ahead Richard I I jumped on You by no no no no it's fine jump go go right ahead you you know Mr Jamar it's a
36:35
great looking picture of him okay perfect yeah but you should follow him on LinkedIn he's in this industry and
36:41
really has some good um post that he put up so he's right many buyers have not
36:47
done this and you know what Jamar many SBA lenders haven't done a lot of these transactions either it's like the blind
36:53
leading the blind which is gonna end up being a dupa show dupa yes God Bless
37:01
America we can do better we can do better but thank you Jamar thank you Jamar it's a very good point very let's
37:08
talk about um our uh seller side um list let's put up that
37:14
scanner um QR code I'm old school there it is Richard oh the Special Report yes
37:20
for anybody who's thinking about buying a business even the incling of buying a business is a report to put together in
37:26
Deb as a significant contribution to the financing side and this um it's it's
37:32
really robust it it jumps into a bunch of areas where sellers are not going to
37:37
be upfront they're not hiding stuff they're not being um they're not cooking the books they're not being fraudulent
37:43
they they're they're just going to avoid or not disclose certain subjects related to acquiring a business for example
37:49
related to deal terms potentially related to any client employee supplier issues and they're not required if
37:57
unless it's material to disclose this this is incumbent upon the buyer and so this report it's a it's a great read if
38:03
I do say so myself it'll be very helpful for them to just open up your eyes to some of the things that you absolutely
38:09
need to look out for because that information may not be presented readily
38:15
and unless you ask the questions you're not going to know the answer so urge anybody to read it it's about I think
38:22
it's about 40 pages but it goes into good detail about of scenarios of these so scan the QR code we got great um
38:29
comments back in uh regarding the report so going to work on another one um in the next quarter not sure yet the uh
38:36
subject but we'll have that available I'm a firm believer that knowledge is power but where you obtain the knowledge
38:44
determines what that power is Amen to that yes good knowledge yeah good knowledge so we have to be careful
38:51
ladies and gentlemen because there is a lot of talk out there of do it this way do it that way way no that's that's
38:57
policy no that that that is policy get to the people that know what they're doing yes just because Google
39:05
tells you this is how you should do it doesn't mean it's right we I just had this as a post on um one of the uh
39:14
communities of business buyers and was trying to explain to them that you you
39:20
need to seek out believable parties you if you're sitting in the if
39:27
you're sitting in the I think we talked about if you're sitting in the auto repair shop getting two people are sitting there getting their car fixed
39:33
turning to the person to the left of you and and having them tell you what's wrong with your car and how the
39:39
transmission needs to be fixed is of no value it's find out from the mechanic
39:44
and so you want to speak to believable parties in this whole process and you know people's intention may be good but
39:50
you're you said earlier the blind leading the blind so in this whole process get your act together and deal
39:55
with believable parties people who've been there done that have' had a a good measure of success in the process and
40:03
experience and ATT TR record that's a believable party and that's who you want that's who you want to deal with whether it be uh you know advisor SBA consultant
40:12
accountant attorney Etc deal with believable parties spend the money because it's usually negligible compared
40:18
to the value of the information that you're going to get and the cost that it will you will incur getting
40:25
bad information from the wrong people that's right Solutions Focus versus
40:30
transactional like I I just want to get this deal done so I can make some money that doesn't make a business buyer feel
40:36
good does it no it doesn't and it rarely works yeah but they're out there there's
40:42
very very transactional focused lenders out there in my opinion quite frankly
40:47
that pass on deals that should get done but they're not taking the time to dive into the personal financial statement
40:54
making sure it's complete by the borrower right because stuff gets missed
40:59
yeah or or payment amounts are written down inaccurately whether it was
41:05
intentional or not intentional verify it that global cash flow could kick the
41:10
deal out the door and maybe was missed by one freaking digit hello wake up
41:16
ladies and gentlemen make sure who you're working with knows what they're doing Amen to that perfect all right
41:23
well listen I think that's going to wrap up the show would you agree yes indeed great show great information
41:29
I knew you would be the uh a wealth of good information related to this subject matter I'm looking forward to next
41:35
week's show and um I think that's it before we we're going to Blink and it'll be next Thursday I know and hope
41:42
everybody will join us again and thank everybody for participating in the good questions and we love the feedback and
41:47
appreciate everybody's support and the comments that come in during the course of the week so thank you everybody for that and thank you see in the background
41:53
for as usual keeping us uh on time organized and all of that wonderful
41:59
stuff she's terrific and follow our YouTube channel like it subscribe at a comment your support is actually helping
42:06
support two business owners right here so that's what it's all about let's support small businesses and until next
42:13
time see you next Thursday 2 pm Eastern baby bye Deb
42:25
bye [Music]
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