Matt Damian

Nationwide SBA & USDA Lending | SBA Division Founder | 20+ Years SMB Finance

[Matt Damian @MattDamian]

‼️SBA Update‼️

As of November 15th, the new SOP takes effect, and there are a couple of huge wins for the small business community that I wanted to highlight:

A buyer of a business can purchase less than 100% ownership - this was a change that happened in August, but worth highlighting again as this is a big departure from history.

A seller of a business can retain equity (partial change of ownership), AND so long as that equity is less than 20% and they aren't considered a "key" employee, they will not be required to guarantee the SBA loan. This was unclear in the August SOP revision, and so this new version clarifies the point with certainty.

A seller of a business who is selling less than 100% can remain an employee of the business indefinitely under certain conditions. This is a departure from the historical limit of a short 12 month transition period.

SBA reconfirmed that a loan with proceeds used primarily (51% or more) for commercial real estate occupied by the business can obtain loan terms of 25 years - think business acquisition including real estate, 25 year term can be massively impactful for cash flow and debt service coverage!

If you have any SBA or lending questions related to a specific deal, my DM's are open and looking forward to hearing from you.

[Matt Damian @MattDamian]

One of my favorite quotes (from my brother) was when early on in his entrepreneurial journey I was with him and some of my friends for lunch. One of my dummy friends said "I want to run a business so I can have flexible hours"

My brother said "yeah it's awesome, you can pick any 120 hours of the week and just work those"

[Matt Damian @MattDamian]

@MySBAPro Oh Matthew

[Matt Damian @MattDamian]

@ClintFiore Just sent a potential deal in DM's

[Matt Damian @MattDamian]

@SBA_Matthias @SMB_Attorney The plate and cup probably have some fiber. Also, fruit. Probably 9.

[Matt Damian @MattDamian]

@lawyer4SMBs This is the way

[Matt Damian @MattDamian]

@SBA_Matthias That's why I'm going into Baking... It's only one letter away from what I do now.

[Matt Damian @MattDamian]

@ClintFiore For franchise - you also have to factor in living expenses and whatever other costs you have outside of the business for whatever the "ramp up" period is vs the acquisition should be able to pay a living wage of some sort.

[Matt Damian @MattDamian]

@MySBAPro "Adjusted" is the magic word - those "adjustments" are going to be subjective.

Either that or the seller is so integral to the business that it's not a true "business" and you're buying a job.

My guess 🤷🏻‍♂️

[Matt Damian @MattDamian]

@sweatystartup Something near a 2x dscr and sub-50% ltv, I would feel pretty good about that too.

[Matt Damian @MattDamian]

@stephenolmon Is there another way?

[Matt Damian @MattDamian]

@SBA_Matthias Scariest costume I've ever seen. HOA Community Manager 😱

[Matt Damian @MattDamian]

@SBA_Matthias Regional business banks are occasionally good at this, and will use a global cash flow analysis similar to underwriting a business loan to qualify mortgage borrowers. My prior institution was great at this.

[Matt Damian @MattDamian]

@SMBFinancingGuy Lots of new quirks in the application submission process that need to be fine tuned, as they seem to be killing deals left and right.

[Matt Damian @MattDamian]

@SMBFinancingGuy Yes - usually spelled out in the term sheet, but you have to be clueless to enforce that if you approve a loan that was materially different than offered. Especially if nothing egregious happened on the borrowers' end. Yikes!

[Matt Damian @MattDamian]

@SBA_Matthias @X @SBA_Ray @SBALenderLyons @SMBFinancingGuy @sbabmarks @MySBAPro Lots to dissect, looking forward to it!

[Matt Damian @MattDamian]

@SBA_Matthias RIP deal. Sorry man.

[Matt Damian @MattDamian]

@SBA_Matthias Congratulations!! 11/6 will be 4 years for me - very important to keep priorities in line, simple not easy!

[Matt Damian @MattDamian]

@marty_crow_yo @gas_biz Using the SBA 7a loan program, you can finance a business purchase without any real estate involved, up to $5 Million. You can include inventory, working capital, new equipment, etc. Approval based primarily on cash flow and industry experience.

[Matt Damian @MattDamian]

@stephenolmon Twice the work, worth the memories.