–Will Provide More Flexible Succession-Planning and Exit Options for Business Owners
MINNEAPOLIS – MAY 15, 2023 – Sunbelt Business Advisors President Chris Jones today applauded Small Business Association (SBA) revisions to rules on 7a loans (the SBA’s most common loan program) that will allow a business owner to do partial sale of a business and thus facilitate longer-term succession.
“New rules for SBA loans will be effective August 1, 2023. Until now the SBA has never allowed partial changes in ownership. These new SBA rules allow the business owner to do a partial sale of the business,” said Jones. “For example, the business owner can sell 80 percent of the business now and take some chips off the table. This gives the seller the chance to enjoy a second bite at the apple later upon exiting the final 20 percent. This can be especially attractive if the seller is expecting robust future growth and would like to still benefit from that.”
“On the other side of the equation, opportunities will suddenly expand with the potential to bring many more people into the world of business ownership including employee buy-outs and sales to family members,” said Jones. “Until now, small-business borrowers have been able to tap into SBA loans to fund the purchase of only an entire business, but not to purchase just part of a business. The revisions to the SBA loan program will allow borrowers to use the loan funds to purchase just a portion of a business.”
“The rule changes should be applauded for creating new opportunities across the country, across industries, and across generations,” said Jones.
ABOUT SUNBELT® – Sunbelt® is Minnesota’s largest seller of companies. Founded in 1978, Sunbelt now has 200 offices worldwide, helping people buy and sell businesses. The Sunbelt Business Advisors Minneapolis office is the largest office in the Sunbelt network with a staff of over 50 advisors, associates, analysts, and business development representatives. The firm provides services to business owners interested in selling their businesses, assistance with merger and acquisition activities, complimentary business value assessments, and advisement for business owners in understanding how to maximize their net proceeds when they exit. The firm provides business brokerage and Mergers & Acquisitions advisory services for companies with revenues from $500,000 to $100 million, as well as finance, exit planning, franchise sales, consulting, and business valuation services. More information is available at www.sunbeltmidwest.com.