Passion & Profit in an American Pastime

Yeah, as, as someone who, you know, is looking to operate the business for a long time, I agree. I think that I was able to get into this opportunity, which is one of the reasons why I approached it, even though it wasn't in the market that I live in. I've been traveling back and forth to Rio Rancho every week, every other week for the last six, seven months.

And you know, that was one of the, the thesis is that I was willing to go outside of where I lived in order to find an opportunity like this. So yes, good, good bones, like I said to the business, good, good market, a lot of good positive vibes in the location that we could grow from. And you know, if you, if you think about the look, if you think about the transaction the way you're describing…

Let's put it that way about that note. Given that there was real estate as part of this and in fact much more than half of the price, half of the purchase price was allocated to the real estate. Does that mean you got the, if you use an SBA loan that you got the 25 year amortization?

That is correct, yes. SBA 7, a 25 year amortization. Our goal from a financing perspective is to refinance on two years in a day into a 504 which is going to significantly lower our interest rate.

So the first two years because of a prepayment penalties I believe 5% year one and 3% in year two. We're not, we're not going to attempt to refinance most likely into a lower rate. And we are paying, you know, prime plus two or around that.

So it's not cheap. But you know, from a perspective of being able to own a large majority of the business, I had some friends and family come in as well, a little bit. You know, the SBA is obviously the way to go.

Yeah, yeah. But going back now to the EBITDA coming off of the business, $250,000 a year and you know, no capital expenditures and just, just what it was generating on a $2 million SBA loan, even with 25 years of amortization. That's, that's, that's going to, that eats up a lot of the ebitda, does it not?

Absolutely. Almost all of it, yes.

Almost all of it, Yeah.

I mean especially now since we've, we've borrowed an additional $600,000 for improvements at that point now with effectively a two and a half million dollar note. We are, yeah, all of that EBITDA is getting eaten up with interest payments. So no choice but to, to continue to grow and be more, be more lean and grow top line.

Okay. So we 25 year AM SBA loan, $2 million purchase price, took some friends and family. Can you just net out here the total terms of the deal?