Entries by acscreative

How does the SBA 7(a) Loan Program Apply to the COVID-19 Stimulus Package?

The Senate has approved a colossal $2 trillion stimulus package.  The key feature of the package is a one-time $1,200 direct payment to adults; however, the legislation included numerous proposals for aimed to help small businesses experiencing adverse impacts from the pandemic.  The highlight of the small business relief is a $350 billion small business […]

How Shareholder Compensation Affects Value

Question:  What’s the going rate to hire a business owner these days?  Or put another way… how much should an owner-operator pay themselves? In some privately held companies that may be a question that is answered by the Board of Directors.  But in most privately held companies it’s a question answered by a single person: […]

Understanding Terms: Main Street vs. Middle Market

We often throw around the terms “middle market,” “lower middle market,” and “Main Street.”  These are pretty common terms in the finance, banking, and M&A world, but probably less so to most business owners and entrepreneurs.  For the sake of clarity we thought we’d dive in.   Defining Main Street vs. Middle Market It seems […]

Understanding Seller’s Discretionary Earnings

So you’ve heard someone throwing around the term “Seller’s Discretionary Earnings” and you find yourself thinking “my earnings aren’t discretionary at all.”  Let’s jump in and understand this oft-misunderstood term (which also, confusingly, goes by “Seller’s Discretionary Income,” SDE, and SDI…).

How To Get a Business Loan

Your small business is ready to grow and you need a loan to make it happen. Just like with a personal loan or a mortgage, you will want to shop around and find the best rate and terms to meet your needs. Being prepared will be key to expediting the process. Follow these four basic […]

3 Secrets to Making Your Business More Sellable

One of the challenges that we often face is correlating value to “sellability.”  In many cases a business may have value to the owner, but there may be a very limited market for the company.  (In fact, this notion is the basis of the concept of a Discount for Marketability.) For example, a small  3-person […]

Business Sale-ing into Retirement

Retirement planning is a long uphill battle.  As financial planning professionals will tell you, the sooner you start putting in place a comprehensive plan, the better off you’ll be.  Oftentimes, small business owners invest everything into their companies and bank on utilizing the proceeds from the future sale of the business to fund their retirement.  […]

When Do Earn-outs Really Work?

Here’s a universal truth about earn-outs: buyers love them and sellers hate them.   From a buyers point of view, what could be better?  We are deferring a portion of the purchase price and transferring risk back onto the seller.  From the seller’s point of view…. what a load of horse-hockey!  

How M&A Strategy Can Help Mid-tier Government Contractors Scale

Mid-tier contractors face unique challenges competing for federal dollars.  Sized out of small-business preference programs, they must battle large vendors’ hefty BD teams and extensive past performance qualifications. Growing contracts organically is time consuming, requires large amounts of cash upfront, and necessitates niche expertise relating to each contract. As we’ve all seen, the preference for […]