SBA lending - Owner's post-close involvement

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by a searcher
in Dallas, TX, USA

3yrs ago

SBA lending - Owner's post-close involvement

Hello

There's a company i'm interested in buying.

what is the maximum allowable time for a seller to stay on board post-closing as allowed by SBA lending?

While it's not necessary for them to stay on board longer than 6 months it would definitely make things a lot easier for me in the long run for them to stay on as long as possible.

Also is there any type of pay/incentive structure you guys recommend in regards to making sure the owner is doing the best they possibly can post-close?

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reply by a searcher 3yrs ago
from Rice University in Houston Heights, Houston, TX 77008, USA

I like structuring sellers notes that are tied to firm performance with a high, on par, and low performance payback. This leaves the seller in situation where they care more and want to stay involved longer.

reply by a searcher 3yrs ago
from Yeshiva University in Boca Raton, FL, USA

Within the last few weeks, there's been rule changes to SBA financing allowing more seller involvement. I'm not an expert - no experience actually :) - but definitely talk to your lender about the latest changes and how that can help.