I think you can share that. Yes, just shy of four is like 3.92, I think is what it came out to. Great. So this ended up being what we call a self-funded search deal or an SBA style deal at a size range that self-funded searchers love to find.
Acquiring Minds
4th Time's the Charm: 3 Broken Deals to Buy a Great Business
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Very reasonable multiple for that size. And how did you structure the acquisition?
It was a 10% seller note with a two-year standby, which was the advice of my broker, Sam. I highly recommend that if you're going to do seller financing is that two-year standby, which basically means the note accrues interest, but you don't make payments until the beginning of year three. So helpful because in most cases, you're probably going to keep the owner on for a period of time.
So you've got that additional payroll that's not cooked into the books because you've got yourself and an owner for a period of time. And then you just have unforeseen expenses. And of course, you're trying to grow any business that you are buying.
So it gives you that extra room to make the investments that you need to make and to kind of get through any speed bumps that you might not have seen coming. and still have a game plan at the beginning of year three to start your repayments on that piece of it.
that seller note was amortized over how long what's the term uh so the sba requires you to amortize over 10 years or the length of the loan um and that's there's just no way around that uh we the seller was not interested in that and so we did a side arrangement for a five-year deal okay so we he's getting fully repaired repaid years three four and five
Ah, okay. All right. And then the SBA piece was 80%? Yes.
Yeah, roughly. Yeah.
With closing costs and some different stuff in there. Okay. And so you had to bring 10% of your own equity? Yes. And can you share what you came out of pocket for or directionally? Yeah.
um all in it was about a half million bucks um if you just take a step back because i um I had some opportunity costs that I, where I, I thought the process was going to, that was the other thing I would, I would say to anybody, um, expect the process to be a longer one and not a shorter one, not just after you find the business, but just finding the business.
Um, I figured I'd have a business, something under, you know, under an LOI in a couple of months of searching. And, and of course that wasn't, that wasn't the case. Um, So, yeah. So you're factoring in those additional months of opportunity.
I'd say even without that, I'd say for 400 plus something like that.
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