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VIDEO: How to Finance an Existing Business or Buy a Business Using the SBA 7(a) Loan Program up to 10m

From the Desk of Josh Kim

Every day, thousands of existing business owners wake up and wish they could sell their business. Don’t believe me? Just look up a business broker in your area, call them and ask how many listings they have and you’ll have a better idea of how many business owners are dying to be rid of their business to retire somewhere after working in it for 20 years. Most businesses that go up for sale, actually don’t even sell. You could be one of the many entrepreneurs in the country helping to fill the gap of retiring business owners by taking it off their hands.

Buying an existing business is a massive shortcut to being cash flow positive from day 1, because you’re taking over a business that already: Profitable, Has an In Demand Product/Service, and Has Key Staff already in place.

One of the greatest small business financing options we have available in the US that no other country has anything close to, is called an SBA loan. In the shortest explanation I can provide, the US Government through the Small Business Administration will guarantee 75%-90% of a loan made by a bank under this program up to $5M. You can use one of these loans to purchase a small business - even if you don’t have a ton of collateral or personal cash. Banks love them because they carry very little risk with the guarantee, and they get to provide a small business owner with the capital they need to buy, start or scale their small business.

I will go more into detail later about how I was able to purchase three businesses collectively totaling $3M before I even turned 21 with these SBA loans and show you how almost anyone can get the same type of loan, but here are some proof pieces from two of them showing you it can be done: Deal 1, $1.5M. Only 6 months later, I completed my second business purchase: Deal 2, $932k.

These SBA loans are government guaranteed loans that are underwritten by regular banks all across the country. Just like a government guaranteed student loan, or mortgage, lenders are more comfortable taking risks they otherwise wouldn’t, because the government guarantees mitigate risk. And in the case of a 19 year old with no real estate collateral and limited personal resources who wanted over a million dollars in financing to buy a service company that also had no real estate or tangible assets, a 75% guarantee was all they needed.

For the first business, I only put in about $10k of my own cash of the 10% equity contribution requirement and raised the rest in the form of bridge financing from an investor who I bought out later. Even if you don’t have a lot of personal cash to invest in a deal, don’t worry. I’m actively looking to bridge capital to people to buy a business much in the same fashion that the first investor did for me.I’m sure most of you reading this are skeptical that it’s really that easy to raise money to acquire businesses but I’m here to prove that it’s a lot easier and simpler than you might think. The business model of trying to raise seed capital, then venture capital, and hoping you’ll one day be profitable or exit through some spectacular buyout offer is just unnecessary for most people who want to run a small business that makes them a good living.

Who is this For?

If you’re an existing business owner who wants to learn how to access more capital in his business, either to just expand, buy out a partner, buy real estate for your business or acquire another business, this is for you.

If you’ve wanted to start or buy your own small business, but you didn’t know where to start with getting the financing, this is for you.

If you’ve wasted time, money, effort and sleep on trying to start a business that never went anywhere and want a foolproof business model on how to be in the driver’s seat of a cashflow positive business in less than a year, this is for you.

If you hate your boss and have hated being an employee and your whole life and only have done so out of necessity, and want to run your own small business and set your own terms and hours, this is for you.

Who is this NOT for?

This is NOT for someone who does not want to roll up their sleeves in running their own business. If you are comfortable with your day job and don’t want the freedom of running your own business, don’t bother going any further.

This is also NOT catered towards people who have absolutely zero business expertise or managerial experience. Lenders will want to see at least some business experience of some kind, whether it be running a small e-commerce shop for yourself, or through a management role at your current job. Not to say if you have very limited experience it can’t be mitigated by a partner (which is what I did to get the loans I did at such a young age) but this process is not catered towards people who might fall in that category.

This is only for people who (a) have an existing business, and they want the know-how on how to get inexpensive, non dilutive capital to grow and (b) people who don’t have a business today, but want to have one as soon as possible - through purchasing an existing one.
I have to emphasize that this needs to be something you WANT. You have to WANT financial independence from your job, you have to WANT to have your own business. If you already have a business, you have to WANT to grow. If you’re happy where you are with your business/job/life, then don’t bother reading further. There is work involved with this process and I can’t help people who don’t want to help themselves.

If you’ve ever wondered why private equity funds make so much money, they follow a simple formula. They buy companies that are already making money with mostly borrowed capital. They use the profits of the business to pay down the debt, and sell the company after a few years. Think like with buying, holding and then selling rental properties, but with companies. Here’s the truth, the fastest way to go from making $100k a year to making $500k a year is to purchase and take over an existing, already profitable business - in much the same fashion as private equity groups, just on a smaller scale. Many entrepreneurs are already doing this on a daily basis, but most business owners are familiar with their business, not the intricacies of raising money, and don’t know how to go about it.

It is possible to go from wherever you are today to owning a business that is profitable to the tune of $300k, $500k, or even $1M/yr+ in 6 months. Unfortunately, most people looking to buy a business or leverage SBA financing get discouraged after talking to 1 or 2 large banks about a prospective SBA loan. Many times they’ll hear the same generic excuses from a large bank like Chase or Wells Fargo “We don’t do a lot of those loans for business purchases” or maybe “We require at least 75% collateral coverage” The potential borrower will shrug their shoulders after hearing this and think that all SBA lenders must be the same and give up on their attempts to get SBA financing.

The reality is, if you have the right knowledge on how to approach your business purchase and use the correct lenders to do your deal, you’ll have several clamoring to finance your request. Not all SBA lenders are made equal. Some completely SUCK at it, even some of the largest banks in the country are horrible at it. There are a few supposed gurus out there who claim they can show you how to buy a business have not really acquired any businesses themselves and are going to only provide you with surface level knowledge. I’ve personally been through this process several times over the last few years and have lots of first hand knowledge on how to definitively get your loan closed as quickly as possible with the least number of headaches.

Now I’m sure you’re still wondering, how exactly was I able to get millions of dollars of these loans at such a young age? And more importantly, is it as easy as I’m mentioning? Did I have a rich uncle, a connection at the bank, or some other leg up that nobody else has?

Well, some backstory on me. I was 18, had finished school early, and had worked a few odd jobs. I had a small ecommerce business myself and was working a job with a CA tech company, but I really wanted to run my own business, a proper full on business with employees. I was by no means anything exceptional from a previous accomplishment or net-worth standpoint. I had done some research on the SBA loan program, but was very frustrated at how difficult it was to find the right lenders to finance a business purchase. I kid you not, I called over 100 different banks, and eventually I figured out which ones lent for these types of deals. I also learned by spending hours upon hours talking to these bankers, what types of things they need in a loan request in order for it to get approved and funded.

My First Acquisition in 2017 Using the SBA 7(a)


The first business I purchased was owned by two guys who had disagreements on the direction of the business. One wanted to focus on something else, so they decided to sell. It was doing over $3M in revenue and the net income was close to $700k. They wanted $1.5M, but I was 19. I didn’t have $1.5M. So what did I do? I turned to the US Government’s Small Business Administration 7(a) loan program with a 7(a) loan from a local bank in Chicago.

I had the sellers take a portion back of the deal in ‘seller financing.’ I go into depth and explain the different ways to negotiate the purchase price and structure a deal on an acquisition in our resources. The loan total came to: $1.2M. The monthly payment on the note came to $14k and was easily covered with the $50k+ monthly cash flow. I replicated this with two other businesses in the following 14 months, scaling our total topline sales to $8M+ with the purchase of a business that was doing about $2M a year and another that was doing a little over $3M.

It really is that simple. If you talk to any small business banker who specializes in doing loans for business sales/purchases, they’ll tell you deals like that are as common as rain on Maui. In fact, in 2020, lenders lent out about $22.6B in loans under the 7(a) program (separate from the stimulus payroll loans you might’ve heard about) While down a bit from 2019’s $23.2B, it just shows a LOT of loans are made under this program, pandemic or not. And here’s the thing - these banks are CLAMORING to make these loans because they are very profitable for them and carry very little risk with the guarantee of the United States Government behind it.

This is not to say there aren’t any pitfalls in this process you’ll have to make sure to steer clear of - one of the businesses I took over had some fraudulent shady and definitely illegal business practices that weren’t apparent in my initial review. We had to fire 8 staff members for perpetuating the shady practices and part ways from a couple of the business’ accounts. Lost a few hundred grand in revenue along the way but a valuable and relatively cheap lesson.

Since getting those deals done, a decent number of people have heard about what I’ve done since doing interviews here and there. I get messages in my LinkedIn inbox weekly from business owners or prospective business owners who want advice on how to replicate what I’ve been able to do. I’ve helped a few people on one-off consulting engagements, but have been pushed to put my know-how in a larger reaching platform by putting it all online. My goal is to put the acquisition knowhow and knowledge on how to leverage loans to other business owners and prospective business owners.

Anyone is also free to try and learn the intricacies involved in finding, vetting, negotiating, financing and finally, closing on the purchase of a small business, but without someone helping you, you could be overlooking details that might have catastrophic consequences, or you might just be losing out on tens of thousands of dollars in savings with correctly structuring your deal.
You and anyone else out there are also free to try and learn the ins and out of the SBA financing world. Learning the intricacies, the nuanced rules, finding the right lenders for your industry, geography and business profile is HARD if you don’t have someone helping you or tons of spare time to blow. Getting financing is easy - if you know how to correctly present your deal to the right lenders for your unique situation.

Without the right know-how and resources, it can feel like stumbling around in the dark, trying to find your way to the bathroom while you’re half asleep. But, you can save countless hours and thousands of dollars in the long run by making sure your deal is done RIGHT on the front end with the right advisors. Whether you just need an expansion loan for your current business or want to leverage it to buy a business, doing it correctly on the front end is critical.
Almost anyone can qualify for this financing to buy or grow a business - even if you don’t have the greatest personal financial situation, or other blemishes on your record (financial blemishes or otherwise) You can leverage this information and could be running your own business in less than 6 months by following the same process that I did.

Most people have no idea where to start when it comes to finding a lender to finance a business purchase. The way that most might go about getting an SBA loan in general would consist of filling out some request forms on SBA broker websites. These are not as helpful as directly working with a lender because these sites are just grabbing your information and selling it to banks who actually do the SBA loans. You go back and forth with a few of the lenders, half of them might say that they don’t lend to your city or state, others might pass because you’re trying to purchase a business - and they “only finance real estate.” You get fed up with filling out form after form for each new lender, only to hear a basic rejection reason that they should’ve known early on. All of that is even assuming you’ve done your homework finding a business for sale, vetting it on the front end, negotiating a price, and even having a loan request to bring the lender in the first place!

"Josh... How can you help me?"

Now, what if you could get ALL the resources you need on how to find, qualify, negotiate, finance and close on the purchase of a small business, or get financing for your existing businesses all in one organized platform? What if you had access to someone with a rolodex of 50+ specialized lenders across the country who can review your financing need and nearly guarantee bringing at least 5-6 lenders to the table to BID for the opportunity to finance your project?

Just think what you’d be able to do with the know-how - how would you spend your first $10k, 20k, and even $100k you’d take home for yourself from your newly scaled business?

"Well Josh, I don’t have the greatest credit score. Had a few late pays, but generally pay my stuff on time. I got turned down by a bank before for an SBA loan - this won’t work for me..."

Not true at all - lenders have a lot more leniency on credit scores than you might think, and being rejected by one lender doesn’t mean anything at all! Just because all these lenders do the same loan product does NOT mean they all have the same exact criteria. The same request at 10 lenders might get any combination of approvals or disapprovals for entirely different reasons, all the reason more to let us understand your situation and need and find the right lender.

"I have no idea where to even begin on buying a business… How would any of your resources help me, specifically?"

Well, conveniently I cover all the basics you’ll need to understand to purchase a business. Everything from how to find the right kind of attorney to do the purchase agreement to a basic due diligence checklist - I have, and am glad to show you.

"I have student loan debt, a mortgage and some credit card debt, will I still be able to get an SBA loan?"

Yes! Unless you’re seriously delinquent on your student loans or other Federally guaranteed loans (FHA mortgage for example) you’re completely fine. The bank will just factor it into the ‘global cashflow’ analysis.

So, as you can see, there’s a huge opportunity sitting right in front of you right now. Now is the best time in awhile to borrow money - rates are at historic lows, and it’s almost never been cheaper. You want to grow, start or buy a business, why not do it? Want to take your income from $100k a year at your job, and scale it to $500k take home? Find a business in the size range to buy, get the financing, buy it, and you’re there! Want to scale your existing business from netting $500k and get it to $1M+? Get that financing you need to add another location, refinance that expensive debt, grow it like you know how, and you can get there.

Now, you could always do things the harder way. Continue working that job you hate for another 5 years, save up another $40-50k and THEN get around to starting your business without having to borrow money. But really, is that how you want to approach it? That approach would cost you over $1M in earnings over the same period if you just went out and bought a business that let you take home $200k more than you do now.

Like I said early too, you can always try going through this process all on your own, figuring it out by stumbling along, trial and error, but I guarantee this process will take much longer, you won’t get the best deal with your lender, if you are even able to get it done at all.

“Well I already own my own business” some of you might say, “what help would you be to me? I can always call my bank and ask them for the same loan!” Yes, you can. But if you can, why haven’t you? Why haven’t they already given you what you asked for? I’m helping 2 friends of mine get $5M each for their businesses; one of them does healthcare services, and another has a business in a surgical device sector. We are working with lenders that they would’ve NEVER been connected with if it wasn’t for my evaluating what kind of businesses they had and who would help them best. On top of that, I’m making sure they get their loans at rates far below what others would charge. A 1% difference in the interest rate on $5M is still $50k a year in interest… But go ahead, if your bank knows you aren’t shopping anywhere else for your loan, they’re going to give you the best rate without you pushing too hard… right?

Again, these resources are for people who want to buy a business or grow their existing business with these financing tools that are available for everyone, but not always known about or used.

Again, there are tens of thousands of people who are already getting SBA financing to grow or buy a business every year. It’s a lot easier than you might yet STILL think.

Showing you again what a 19 year old kid was able to do with limited personal cash, no real estate collateral and a very thin personal credit history:

What excuses do you have? Do you really think you’re in any worse of a position than I was at the time when I got those loans? Don’t you think you’ll have an even easier time than I did at the time?

If you’re an existing business owner, I guarantee you’ll find at least 10x the value in what you spend on this if you take advantage of anything I cover.

If you’re a prospective business owner, I guarantee you’ll find at least 100x the value in what you spend on this because you’ll be able to finally quit that job you have and run your own business full time generating an income greater than your salary.

My goal is to help 100 people become business owners, and help 100 existing business owners raise at least a combined $50M in SBA financing in the next 12 months.

Here’s what is going to happen when you work with us at 7a Accelerator:

You’ll be able to finally quit your job and run your own business.

You’ll be able to refinance all that high interest debt in your business.

You’ll be able to buy out that worthless partner who’s been doing nothing but drag you and your business down.

You’ll learn everything you need to know, A to Z, on how to buy a business.

You’ll finally be able to navigate the tricky waters of talking to banks and finding the right one for you and your business.

We’re going to show you exactly what is needed to get an SBA loan. Walk you through all the documents you’re going to need, what factors weigh into the banks’ formulas to ensure you can all but guarantee approval with multiple lenders.

We’re also going to show you how to find, qualify, negotiate finance and close a business purchase. Everything from sourcing the deal, finding the right attorney to help, all the way to the working capital wire hitting your operating account.

If you have an existing business, we will show you what you need to get financing for your business, whatever the need might be… Partner buyout, growth financing, an acquisition, maybe even buying the building you’re leasing right now.

Not only will we SHOW you, but once you have everything completed, we will put your loan request in front of no less than 10 lenders who lend to your industry and geography, ensuring you’ll get competitive bids for financing your request.

So how exactly does it work?

Well, before, if you want to buy a business you probably didn’t even have an idea where to even start. Even if you have an existing business today, you might not have an idea on how where to begin on getting money to grow. But now, you can use our resources and step by step framework to ensure you get the capital you need. Do you see how easy that is?

Right now, if you get an SBA loan for $500,000, you will be saving over $50,000 between guarantee fees and FREE 6 months of payments with the stimulus incentives in place until the end of the fiscal year.

What is this all worth to you? If you want to buy a business, you’re missing out on hundreds of thousands of dollars per year in income you could have, if you were able to start or buy a small business. If you have a small business now, and had the capital you needed to grow, you could also be making hundreds of thousands of dollars more per year.

Effective Jan 19,2021: The SBA is providing a whole host of incentives for their various loan programs. Use them to grow your business.
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How We Help:

 (7)a Accelerator Course

 Conversational Scripts to Getting Funded

 Live Deal Analysis

 1-1 Lender Introduction

 Business Growth Coaching Post Close

 1 on 1 Deal Consulting

 Bridge financing assistance - if you need capital for the 10% down payment on a business, I can make it happen.

Now, what is the opportunity cost for you? Tens, if not hundreds of thousands per year just because you don’t have the tools and framework on how to get the capital you need for your business. Maybe you have a business today that is overpaying for capital - what are you wasting annually in high interest debt payments?

We’re charging probably less than 10% of the total value to a business owner for everything we’ve discussed. You’ll have all the tools and framework you need on how to get your deal financed, acquisition or not. We’ll also help you make sure you have the lowest interest rate possible on your SBA loan, something that could add up to tens of thousands of dollars in the long run All we need you to do is book a 15 minute consultative call below so we can evaluate whether or not you’re a good candidate for SBA financing.

Keep in mind, due to the incentives in place with the recent stimulus bill, the SBA has some one-time offers for NEW SBA loans that will not last forever and we are prioritizing working with business owners who are motivated to take advantage of these incentives before they’re gone forever.

We can only onboard so many new clients per month with our weekly call schedules, so book below to speak with one of our representatives (if I’m not available to talk to you myself) so we can see if this is for you.