Mechanism for Asset Sale with Owner Retention and SBA Eligibility

Member resources:

Frequent asked questions:

What is Searchfunder.com?

Searchfunder.com is an online community of searchers, investors, lenders, brokers and other professionals. Over 80% of those involved in searchfunds maintain a Searchfunder account to help them network, hire, and mentor others.

What are the benefits of membership?

In addition to accessing the most active online network of business buyers, Searchfunder licenses research that is simply not cost effective for individuals. Access over 15,000 industry reports and 50,000 transaction financials. You also get monthly credits for contact information for your company sourcing campaign with the option to purchase more at drastically discounted rates. Searchfunder has pre-purchased access from these data providers in order to empower individual buyers and to help searchers level the playing field versus private equity.

Do you have deals?

While we are primarily a buy-side network, we do have hundreds of brokers that regularly post deals to the community.

Can I find an internship on Searchfunder?

Absolutely! We have the industry's largest intern job board. If you are considering a search, the first step is to help another business buyer so you can hit the ground running.

What does it cost?

Searchfunder is a subscription service. We offer flexible monthly, annual and lifetime memberships.

Monthly

$79 / month

Annual

$19 / month

Lifetime

$432 / once

Those who maintain an account with us for over 4 continuous years are permanently added to the community without the need for a membership.

Do I need an MBA to join?

While a large number of our members come from dedicated programs at Harvard Business School, Stanford GSB, Chicago Booth, and other top programs, searching is no longer reserved for the elite. With the current abundance of dry powder in private equity, and an increasing number of business owners reaching retirement age, good deals rarely go unfunded.

Post a question, deal, job, etc...

Make a post...

Complete registration to post.

by a searcher from University of Alberta - School of Business
in Miami, FL, USA

1yr ago

Mechanism for Asset Sale with Owner Retention and SBA Eligibility

Hello everyone,

I am looking to understand if there is an existing mechanism to acquire a company through an asset sale while allowing the owner to retain ownership in the new structure and still make it SBA eligible. Our goal is to achieve a clean slate compared to a stock equity acquisition.

Thanks for the insights.

0 Likes

220 Views

reply by a searcher 1yr ago
from Western Washington University in Seattle, WA, USA

Following - interested to see if you were able to maintain SBA eligibility with owner retention. Wondering if sequencing the sale of the business first and then creating a separate employement agreement (with equity) for the previous owner post-close as an alternative solution?

reply by an intermediary 1yr ago
from The University of Chicago in Chicago, IL, USA

Adding details to ^redacted‌ comment: It seems seller can retain ownership in an Asset sale.

There has been a recent update to SBA procedures regarding partial changes of ownership. On December 6, 2024, the SBA issued Procedural Noticeredacted, which provides several important updates to SOPredactedThe key changes related to partial changes of ownership include: Multi-step partial changes of ownership: The SBA has added language to allow partial changes of ownership that occur through multiple steps, resulting in a new entity owned by some or all of the original business owners plus one or more new owners5. Equity requirements clarification: The notice clarifies that the required cash contribution for partial changes of ownership must increase the business' debt-to-worth ratio based on the current quarter's balance sheet prior to the change in ownership4. Loan maturity update: The SBA is now allowing loan maturity for all types of changes of ownership, including partial changes, to be based on a blended maturity of the business' assets. Additionally, if 51% or more of the loan proceeds are for real estate, a loan maturity of up to 25 years is permitted5. Co-borrower requirement: The notice reiterates that both the business and the person(s) acquiring the ownership interest must be co-borrowers on the new loan4. Guaranty requirements: The SBA clarified that to determine who must provide a guaranty, the percentage of ownership is measured based on beneficial ownership