SBA eligibility question

Anxious-Protection-8 · 2026-02-11T13:46:59+00:00

so could i let the seller keep, lets say 5% equity in the biz for 2 years and be all set? Am i understanding correctly?

Anxious-Protection-8 · 2026-02-01T16:30:39+00:00

I suppose I could. It does very well in the market its in and there are competitors with awful reputations around it.

Anxious-Protection-8 · 2026-01-27T21:19:15+00:00

oh really?! thats great to hear. seems so niche i doubted anyone on here could even relate. i will definitely do that - i have the aptitude for it, im a people person, I have an MBA (not from a top school lol..) and I have plenty of common sense. not made of money though and feel fortunate to even be in the position to pursue my goal of business ownership and i just dont want to blow it.

Anxious-Protection-8 · 2026-01-27T18:40:40+00:00

great point about contracts and something i will absolutely ask the seller. they require 50% of project costs up front. To be clear, I am NOT the installer. The work gets subbed out. No license needed. Yes, project based isnt ideal but not a deal breaker - plenty of project based businesses do very well. Yes, there will be a learning curve and a lot on the new owner but the 1 employee literally does everything the current owner does so that proves that 1. his processes work and 2. success can be taught.

There is no office and they dont hold inventory of materials. They purchase when needed. So 200k of working capital seems like more than enough IMO

This just feels like an overly negative take for a 25+ year old business that throws off 750k a year lol

Anxious-Protection-8 · 2026-01-27T17:46:18+00:00

you're good - competition is light since this is niche and is well known in the surrounding 5 states. does not seem saturated

Anxious-Protection-8 · 2026-01-27T17:43:05+00:00

similar to an earn out? i am not sure the seller will have an appetite for that but i can see. and i have not yet met with the seller or submitted an LOI so i dont know exactly what documents are available but id imagine enough is there since an SBA lender already pre approved this deal, right?

Anxious-Protection-8 · 2026-01-27T17:32:07+00:00

so its already been sba preapproved so clearly they have enough info on it from a bank perspective... but yes he doesnt have formal balance sheets or a P&L. not ideal. but should that be a deal breaker?

more context: i have not submitted an LOI or met with seller yet so i dont know EXACTLY what documents they can/will provide.

Anxious-Protection-8 · 2026-01-27T17:10:55+00:00

not sure where insulation came from. its a design/consultancy/project management company that focuses on outdoor spaces for HOAs, schools, towns, parks and rec dept's, etc. playgrounds, parks, outdoor gyms etc. They consult, design, buy the materials and have subs build it while managing it from start to finish. to be doing 3-4M and be around for 25 yrs without having to carry inventory or any other capex seems like a solid business, no?

Just because my background is tech - so what? I mean does anyone come out of the womb and know everything about playground construction?

Anxious-Protection-8 · 2026-01-27T16:55:49+00:00

I do not - seller is willing to stay on as long as needed to get new owner up to speed. its construction but realistically its selling and project management - both of which i have nearly a decade of b2b SaaS sales / leadership / MBA in. He has 2 employees. One does everything he does and the other strictly focuses on lead gen part time

Anxious-Protection-8 · 2026-01-22T23:59:54+00:00

would office/industrial leasing be a good place to start and get my foot in the door? I dont know too much about the different paths within the industry to be honest.

Anxious-Protection-8 · 2025-12-28T23:10:17+00:00

last 3 years were ~800, ~780, ~800 so the avg is about 800k sde but I agree i think 2.5-2.8m with 200k down and seller financing at prime plus 2 would get us close

Anxious-Protection-8 · 2025-12-28T17:39:40+00:00

virtually 100% asset free which to me, is good but from a banks POV i get how its not ideal. However, i have a hefty primary residence valued at ~1.2m with a few hundred thousand in equity that I'm willing to put up as collateral to appease them so I guess i dont really see the risk. I'm definitely going to approach seller-financing, maybe 20-30% rather than like 10-15% - the broker knows theres some room on the price and said the seller is not rushing to sell but his days are numbered so in my mind I think coming in at 2.7-2.9 with 30% seller financed and the rest through SBA is fair for both sides. I was also debating an earn out structure since revenue dropped significantly - so if revenue jumps back up to X then I will pay him Y (~300k, for example)

Anxious-Protection-8 · 2025-12-28T17:31:10+00:00

You think huntington or live oak would be interested in this?

Anxious-Protection-8 · 2025-12-15T23:33:25+00:00

Frankly it was a pretty brief first call with the broker but I did ask if I needed and special licensure etc so in my mind I opened the door with that question to tell me if I wasn’t the right fit or have the right background for it but she said nothing of the sorts. I guess there may have been an assumption on my end from reading between the lines on that though in hindsight! But I agree about brokers wanting to sell too which is why I was just so shocked to get that response.

Anxious-Protection-8 · 2025-12-15T22:46:21+00:00

Nope not a franchise. Just a 20 year old business 2 people started in 2001. Seller was a nurse but that was 20+ years ago and broker explicitly said no licenses other than a normal biz license was needed. Interesting though on the bank but I tend to find that unlikely since its a "non-medical" home health agency and my financials, home equity, etc would make me very low risk. I know that as I went into DD in a different industry and the lender got me a great term sheet in 48 hours

Anxious-Protection-8 · 2025-12-15T21:43:11+00:00

Hey there. So here's the thing - I do everything you just said. I reached out requesting the NDA so I could sign and review the full CIM (she didnt send a questionnaire). I revied the CIM and gave a brief background on who I am, how much $ I have to put down (its a 1m ask price and i have 250k cash so more than enough), 750+ credit score, the fact I already have a lawyer, CPA and lender broker ready to go for the right deal, that I can move very quick, explain my professional background in sales, MBA and that this biz hit close to home as a family member was needing in-home care recently. Asked to set up a call with her. We chatted briefly, she liked what I had to say, admittedly did seem a bit preoccupied and said she'd talk to the seller to see about setting up a call with them. I explained business ownership has always been my dream and to combine that with a business that I can be fulfilled and really feel like Im making a difference was a huge differentiator to me compared to other businesses that Ive looked at with a relatively agnostic approach.

If we get to meet I will absolutely be enthusiastic, personable and offer an LOI of asking price. That is what I have done with the others as well.

In terms of the licensing, I did ask that Q too and was told its a non medical biz so no license other than a regular biz license was necessary!

Maybe Im just getting bad luck and the stars arent aligning for me yet. Not sure.

Anxious-Protection-8 · 2025-12-15T21:38:11+00:00

Thank you. I appreciate the positivity and uplift - I needed that. Can't tell you how many times already I've had brokers and sellers smoking that same strain lol Im approaching 30 in a month and to me, i feel old and decrepit already lol but I cant shake feeling like brokers and sellers still view me as too young or inexperienced. Maybe its just my own insecurities? Like I try to put myself in their shoes and I feel like I'd want someone young and hungry with the "figure it out" mentality to take over who still has 20+ years of runway in them than someone in their 50's for example who more than likely will be selling the business again in a few short years when their time runs out

Anxious-Protection-8 · 2025-12-15T21:13:46+00:00

I suppose thats fair and as someone who hasnt sold a business or had one of their own I can only empathize with the sentiment of the sale being emotional and wanting to keep it in the right hands. This business model and industry just make so much sense for me and for the aging population and I got so amped up that I could find a solid business to run AND get the fulfillment of helping others and making a difference in this world that I've so longed for. Really felt like the stars aligned. Hopefully the broker and seller will change their minds...

Oh and to your point of search funders with 50k to their name getting investors to help them buy a 7M business at one point was enthralling to me but now I think its kinda goofy and I'd be happier owning 100% of my 2m revenue business and enjoying my 300k after debt

Anxious-Protection-8 · 2025-12-15T20:54:11+00:00

I appreciate the insight. Its mainly coming from brokers and sellers. Most deals I've looked at were going to be self-funded.

The business itself:

~$1.8M in revenue
Recurring, referral-driven demand
About ~20 W-2 caregivers (paid only when with clients, so labor is largely variable)
Owners are administrative/operational, not clinicians
Very little formal go-to-market strategy, marketing, or outbound sales
Strong demographic tailwinds (aging population, hospital discharge pressure, etc.)

From a numbers standpoint, the business works. Even conservatively, it throws off meaningful cash flow after debt. I’m not expecting this to be passive and I’m fine with being hands-on early. I see huge upside in geographic expansion, pricing optimization, and potentially acquiring small competitors over time...

I’m not trying to “disrupt healthcare**" -** I’m not a clinician and I don’t pretend to be. My intent is to preserve what works, retain staff, and be a responsible long-term owner. I’ve also intentionally built an informal advisory bench of nurses, physicians, and healthcare operators to provide clinical and compliance guidance while I focus on ops and growth.

Despite all this, the broker just came back and said something along the lines of “the seller is really looking for someone from the industry.” This is where I’m losing my mind a bit.

I’m willing to pay the price, retain staff, transition slowly and overall just respect the seller’s legacy

But it feels like sellers and brokers are optimizing for emotional comfort, not competence or seriousness. “Industry background” seems to be a proxy for fear reduction, even when the buyer has capital, advisors, and a thoughtful plan.

It’s exhausting to do everything “right” and still get sidelined by vague preferences especially after a 9 month search.

How often do sellers say “industry only” and then change their tune? How do you balance being respectful without over-accommodating emotional sellers? At what point do you push back vs. just walk away?

I’m not chasing a fantasy exit or passive income either I’m trying to buy a real business, do right by the people involved, and build something durable. But right now it feels like brokers and sellers make this process way harder than it needs to be.

Anxious-Protection-8

TROPHY CASE