SBA & Conventional Financing

We work with several local, regional and national lending sources to help Buyers purchase accounting practices. The purchase of an accounting firm will usually qualify for SBA and conventional financing. Even with the tightening of credit due to the past subprime mortgage fall out, loans to acquire accounting practices are obtainable if the Buyer has personal collateral, good credit and the practice is profitable.

We assist in all phases of the financing. We work with the buyer to structure and prepare the application, package the Sellerʼs financial information and submit it directly to the lender, and communicate directly with the underwriter when necessary to deal with questions and concerns. Once loan approval has been obtained, we work directly with the Buyer, Seller, and Loan Processor to keep the process moving. We arrange for an escrow agent to close the transaction, arrange for the wiring of loan proceeds, assist in the preparation of settlement documents, and we are present at the closing to make sure nothing is left to chance.

We work with both the Buyer and Seller to structure an amortization schedule that is acceptable to both parties in the transaction

Seller Financing:

It should be noted that a high percentage of acquisitions use a combination of external financing sources and Seller financing. Seller financing can take the form of a short term (1 year) or a longer term note. Seller financing for a portion of the purchase price has the following advantages:

Seller Advantages:

– The interest rate on the loan is often much higher than conservative investments such as certificate of deposits and government bonds.

– The Seller is taxed in the year the cash is received (less any basis the Seller has in the firm) with regard to the sale of the firm. Therefore, the tax liability is spread out over a number of years.

Buyer Advantages:

– The Seller will have more of an incentive to work with the Buyer on client retention, employee transition, etc. if the Seller still holds a note from the Buyer.

– Seller notes are usually more flexible than external financing. Often the note is structured so a high percentage of the payments are made during tax season so the Buyer can cash flow the practice during the slower revenue months.