$3M Asphalt Contractor - Under Contract / LOI - Now What?

searcher profile

February 12, 2025

by a searcher from University of Michigan - Ann Arbor in Reno, NV, USA

Well, I finally have a great business under contract. A local excavation, asphalt paving and demolition provider. Currently entering due diligence. The company doesn't meet the recurrent revenue standard, since most of this type of work is project based, but I do believe this type of construction infrastructure work is somewhat recession resistant. Problem is, it takes 4 years to get the type of contractor licensing required in Nevada. We set up the deal for the owner to stay on as a paid consultant and the QE, for four years.... Which makes me a little nervous. I've met a couple SBA lenders who seem confident they can get a deal funded, but has anybody dealt with this type of deal? What happens post acquisition?

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Reply by a lender
from University of Southern California in Los Angeles, CA, USA
^redacted‌ - 4 years to get licensed is insane. That’s definitely the longest licensing period I’ve come across. Renting the sellers license by keeping them on the payroll is how most deals like this are done. How are the conversations with the lenders going?

I am sure we can run a full lender outreach process for you and save you some money. The bank pay us after your loan closes, so this is a 100% free service for you. We work with all the major SBA lenders

You can reach me here or directly at redacted You can also click here to schedule a meeting with me: https://cal.com/ishan-jetley-3d73m8/30min. Look forward to chatting!
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Reply by a searcher
from INSEAD in San Francisco, CA, USA
It's the same over here in CA - 4 years of journeyman level experience to take the CSLB test. I am looking into paving companies myself and I don't consider it too big of a hurdle. You can use an agency (ex: https://rmoagency.com) that connects licensed individuals with people like yourself and write out a contract for the length of time it would take you / someone else on your time to get licensed.

Post-acquisition, I assume it's just business as usual as long as your RMO / RME sticks around, otherwise you just get a new one.
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