This week we're featuring an educational article on growth through acquisition from one of our valued community partners, John Wahl from Live Oak Bank!
Strategic Acquisition: A Good Choice for Growth
At Live Oak Bank, our SBA mergers and acquisitions (M&A) financing team has seen an increasing number of strategic acquisition requests. We are very pleased by this because we believe that there has never been a more advantageous time to use SBA debt to finance growth by acquisition. In this article, we will outline several factors that make strategic acquisition a good choice for a small business looking for dynamic growth opportunities. These same factors also make the debt used to fund strategic acquisitions more flexible and easier to obtain.
If you already own a successful company, you’ve already tested your entrepreneurial metal. You’ve established your business acumen and the foundation is already in place for leveraging your assets. “When first making the move from the corporate world, there are many surprises and challenges that go hand-in-hand with the satisfaction of business ownership. After proving that you know how to maintain and grow an existing business, you see where your skills can immediately improve an acquired business and how the combined entity can supercharge your bottom line more quickly than through organic growth alone,” says Jim Creagan, president of Randob Labs.
Based on a study by Barlow Research, 68 percent of small business owners in the lower middle market (LMM) and 67 percent in the middle market (MM) are expected to retire in the near future. The average age of retirement for both categories is 67 years of age. What makes these statistics so interesting? Based on additional research from Barlow done for 2017, 36 percent of LLM and 45 percent of MM companies are owned by individuals 65 years or older. These statistics show that the current environment is excellent for both buyers as well as baby boomers looking to sell their companies. Strategic buyers stand to benefit the most as a result of their buying power.
To read this full article head to the Live Oak Bank website or contact John Wahl for more information!
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Live Oak Bank: SBA M&A Lending Nationally
Live Oak Bank specializes in acquisition financing nationwide (and across all industries) utilizing the Small Business Administration (SBA) program. Our dedicated mergers and acquisitions lending team has extensive SBA expertise, lending over $1.2 billion to small businesses nationwide.
Experience the Live Oak Difference
-Dedicated, experienced M&A lending team who are experts in SBA lending
-Competitive rates, flexible equity requirements, no financial covenants, no prepayment penalties for loan terms under 15 years
-Flexible terms: up to 10 years for business purposes and 25 years for real estate
-Transactions up to $10 million (combination financing)
-Streamlined process through Live Oak portal technology
Contact John Wahl at john.wahl@liveoak.bank or 303-551-4453 to learn more.
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