We often help business owners follow an effective exit planning process to sell their company. For many owners, the idea of selling to key employees is often desired but seldom a viable alternative due to the lack of capital and very limited access to SBA lending. The SBA's 7A loan program is often out of reach because they require at least 30% equity or down payment from the buyer. The American Recovery and Reinvestment Act not only provides $375 million for temporary loan fee reductions, it effectively reduces the down payment/equity requirement to just 10%.
Forward-looking business owners who engage in exit planning 1-5 years before they actually sell their business realize these new SBA loan changes will create a new and potentially large pool of executives, key employees and first-time entrepreneurs who are now viable candidates to buy a business, even without substantial personal net worth.
Although this may not be a primary objective of this stimulus bill, for business owners who are now able to sell a business to key employees, it will be a very welcome result nonetheless.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/20682/new-sba-7a-loan-program-will-help-key-employees-buy-a-business "