SBA Broker Talking w/ Seller's Advisor

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July 25, 2024

by a searcher from University of Florida - Warrington College of Business Administration in Tampa, FL, USA

All - I had a situation come up today and curious if others have experienced this and what they did. I am two months into diligence on a deal under LOI. The seller's advisor had referred me to an SBA broker at the start of the process. I am running a parallel path with this individual and a couple other banks directly. I worked in PE and leveraged lending prior to my search, so am familiar with raising money. I have three term sheets in hand that I've drummed up and on the terms I want. I am expecting a couple more in the next few days. This individual has drummed up zero interest. That's not the real problem though. I found out today he's having conversations with the seller's advisor about the process behind me back - telling him that the process isn't going well. Now I have to play damage control. He's also told the seller's advisor how I'm proposing to put the seller note on standby. I was waiting for some diligence findings to be final before negotiating that with the seller. Now my hand is forced prematurely.

Has this happened to anyone else? What did you do? My understanding was that he was working for me. Any status updates or structure points were not his to share...

Sorry for the long post.

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commentor profile
Reply by a searcher
from Kennesaw State University in Atlanta, GA, USA
^redacted‌, sounds like you smoothed everything out already but relationships can tend to lean towards the hand that feeds them sometimes. Usually, the best thing to do when a deal has too many back channels causing friction, is to get all the players in a room/on a call, re-align on vision/mission, and put any other cards on the table. Every single time, it's always about the relationships. If those are aligned, the deal will (and comms) will go much smoother.
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
We are a Commercial Loan Brokerage Shop ourselves, and I can tell you we never talk with the seller or any of their representatives without the client's permission. Any phone calls we get we refer back to the client or their counsel. This should not have happened. Those should have been your conversations to have. I would recommend you get with the business broker immediately and update them on where you are at and make them aware the broker was not successful. Hopefully you can repair any damage. Sorry this happened to you.
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