Episode 20: How to Buy a Small Business: Valuation, SBA Loans & Seller Financing Explained.

Should you start a business from scratch, buy an existing one, or invest in a franchise? In this episode of the Score Houston Podcast, host and SCORE mentor PV Bala talks to Jeffrey Jones — President of Advanced Business Brokers, certified business appraiser, and a SCORE mentor with over 35 years of experience helping entrepreneurs buy and sell businesses in the Houston metro area.

Jeff shares insider knowledge on:

·       Why buying a business is statistically safer than starting one (90% of startups fail vs. 70% success rate for acquisitions)

·       How business valuation works — from tangible assets to discretionary earnings and EBITDA multiples 

·       SBA loan requirements, seller financing structures, and how deals actually get funded

·       The role of confidentiality in business transactions and why brokers are essential 

·       What corporate professionals transitioning to entrepreneurship should consider 

·       The Houston business landscape — from restaurants to B2B service companies 

·       Red flags to watch for in financial statements during due diligence

 Whether you're an aspiring entrepreneur, a corporate executive exploring business ownership, or a SCORE client looking for guidance on your next move, this conversation delivers decades of real-world brokerage experience in one episode.

Give your comments at https://scorehoustonpodcast.blogspot.com or write to pv.bala@scorevolunteer.org. Let us know what you like of this episode and suggest subjects on which you wish to know more. 

Transcript

SPEAKER_00 0:02

Welcome to Mentor Conversations at Score Houston, where we bring you insights and stories from our mentors. You'll hear from senior executives, entrepreneurs, and professionals who volunteer their time to guide small businesses. Now, let's dive into today's mentor conversation.

SPEAKER_01 0:44

Welcome to Score Houston Podcast. I'm your host and mentor P. Bala. Today we are joined by a true pillar of the Houston business community, Jeffrey Jones. With over 35 years as a SCOR mentor, Jeff brings an unparalleled depth of knowledge in the intricate world of business transitions. He is a president of Advanced Business Brokers and Certified Appraisers, where he specializes in the valuation and sale of small to medium-sized firms. Whether we are looking to exit your company or acquire your first legacy, Jeff is an expert to understand exactly what makes a business bankable and sustainable. Welcome to podcast, Jeff. Thank you for inviting me. How entrepreneurship has changed from then to now?

SPEAKER_02 1:38

Well, the concept of entrepreneurship hasn't changed, I don't think, but the the tools that we use to operate businesses have significantly changed. Operate our business in brokering businesses has changed significantly. In times past, when we had a business for sale, we'd run an ad in the 70 Chronicle. Today there's not even that section in the paper anymore. It's all everything's done on the internet. Again, back to many years ago, we made everybody come to the office to get information. Confidentiality, when you're buying and selling a business, is critical. And to ensure people didn't just show up on the doorstep of a business owner, we require they come to our office so we get to know who they are, have them sign a confidentiality agreement. And then we would give them packages on businesses that we had for sale. But again, with the internet, everybody wants to do things from their home or office or wherever. So that has changed our business dramatically. So now we do a lot of it by email and through the internet. Confidentiality is still critical. And so we do require, before giving any information about a business, we require that they give us all their contact information and have them sign a confidentiality agreement. Then we can provide a package that describes various businesses that we've had for sale.

SPEAKER_01 2:54

But is there any preference for certain types of businesses that you focus on?

SPEAKER_02 3:02

We're basically what we call a Main Street broker. That is, we handle small to mid-sized companies that you would typically see on Main Street. We deal dealing with size businesses ranging anywhere from 50,000 to 30 million. But our our average deal is probably in a three, four hundred thousand dollar range price-wise. And it covers a broad spectrum. We do probably a third of our businesses we have for sale are restaurants, because there's in the in the Houston metro area, there's over 7,000 restaurants at any given time. 25% of them are for sale. But we handle a little everything. Manufacturing companies we handle pretty much in the same percentage that they represent the industry. Service businesses represent about 35% of total businesses in the Houston area. Manufacturing companies, which we get a lot of inquiries for, but manufacturing in Houston only represents maybe 7% of all the businesses that are out there. Retail and service are the two most uh popular types of businesses. In terms of businesses that people want, wholesale uh distribution type businesses, manufacturing businesses, business-to-business businesses are most popular. A lot of our buyers are coming out of the corporate world, tired of working for the big company, want to get into their own business. And their preference would be to get into a business where they're dealing with other business customers as opposed to retail. And so our probably 65% of our large buyers' preference would be a business-to-business type business as opposed to retail.

SPEAKER_01 4:40

Are you seeing any demand moving up for manufacturing? The government being having so much of a focus on manufacturing. Do you find small manufacturing companies coming in? Are there opportunities out there?

SPEAKER_02 4:54

Yes, there's been the government is has emphasized manufacturing. They have some now unique government programs for financing. Again, in terms of acquiring them, I have I haven't seen any significant increase in the actual number of manufacturing companies. I just have many of our are there are there are oil and gas executives. Uh many of them are engineers, uh, so they have a technical background. And in many cases, they have little or no business experience other than the technical aspect of their job.

SPEAKER_01 5:38

Yeah.

SPEAKER_02 5:39

They reach a point where they get tired of being transferred overseas all the time, or the company keeps changing hands and they're down, they're downsizing or upsizing. Uh and so that causes people to leave. And the option would be to get into their old business. In the Houston metro area, every year, there's about 60,000 startup businesses.

SPEAKER_01 6:01

Yeah.

SPEAKER_02 6:02

Houston is an entrepreneur capital in the world, I think. There's more business to start up here than most any place else. In part because it's easy to get into business here. Rents are reasonable. There's a lot of locations available. There's lesser government regulations on businesses here in Texas. And so there tends to be a lot of people who the options are to get into business for yourself is to either buy a franchise, buy an existing business, or start from scratch. Again, that 60,000 people start from scratch every year. Unfortunately, 50% of those people don't make it the first year. And 90% are gone after four to five years. So it's a highly risky business to start a brand new business. And based on our experience of businesses that we've sold over the years, seven out of ten of all the businesses we've sold are still in business. And so it's much safer to buy a business than it is to start one. But most of the books that you uh find on the bookshelf about getting into business uh relate to starting one. And that's what most people tend to do. Uh, there's only about, oh, somewhere every year, maybe 60 to 100 businesses that change hands in the Houston metro area. Uh but 60,000 startups. Houston is a uh is very active in terms of entrepreneurship, and a lot of people take a risk of jumping into business, many of which aren't fully prepared, and unfortunately don't take advantage of some of the s the score uh uh counseling services that are available. If they did, they'd probably be much more successful.

SPEAKER_01 7:37

But if I had to take uh actually the kind of clients I have been getting and what I have been seeing, it's a lot more of B2C than B2B kind of business uh clients that are coming in. Is it something peculiar? I mean, like you say that's a lot of B2B happening, much more in Houston now.

SPEAKER_02 7:59

Well, you're saying that that's one of the more popular types of businesses. In Houston, there's there's all kinds of businesses out there, certainly B2C, probably more of those types of businesses than anything else.

SPEAKER_00 8:10

Yeah.

SPEAKER_02 8:10

People do get into those businesses. Just from our brokerage standpoint, uh it just seems like the majority of the people that come to us, because they're coming from a business background, yeah, their preference typically would be a a B2B type business. Now, if they're buying a business for their wife or their children, uh then they they sometimes will then expand that horizon into other service-related businesses that are more directly related to to retail customers. Frankly, less risky to buy an existing business already making money than it is to start from scratch. Again, you know, over 90% of startup businesses fail. It is much safer. Of course, it it the problem with with buying a business is you've got to have a little more money up front. That means you can start a business on a shoestring. The amount of money you got to put into it before it makes any money is what causes most people to go out of business. They uh they greatly underestimate the amount of working capital needed to launch a new business and get it to a level where it's making money enough for them to make a living. Whereas if you buy an existing business, you're making, presumably, you're making money day one. They will finance new franchises because they're at least a proven concept. But many of these small startup businesses are aren't really proven. So banks don't want to finance uh many of these small businesses. But if it's an existing business and can show profitability, people can get into that business for, in some cases for little as 10% down, but somewhere between 10 and 20% down, and then through the SBA program, they can get a loan for 10 years, which keeps the monthly uh payment pretty low. Relatively short term, it's actually much cheaper to buy it. Existing vendors are already making money than it is to try to start from scratch.

SPEAKER_01 10:02

So when you're supposing hypothetically, if you're uh looking at buying a business which is running for operating for the last 10 years, 15 years, profitable business, but there is not much of fixed assets or land. Okay, so I I come in as a buyer and say, okay, I would like to buy. Now, would SBA provide a loan without much of collateral either from my side or the business itself is not able to provide too much except for profitability? So will they go by the business or they want some fixed assets to mortgage or something like that?

SPEAKER_02 10:41

Well, the the value of any business is either the value of the tangible assets or some capitalization of the earnings, whichever is greater. And and if that capitalization of earnings gives me a value for the business, then that's what the lenders look for. As fortunately, today the SP through the SBA program and they're guaranteed to banks, banks are willing to make an existing business that has little or no assets, and maybe just strictly a service type business, yeah. They that loan is based on the cash flow or profitability of the business itself, which is another advantage of buying a business, is that you can you can buy one with with that they may have little or no assets, but as long as it has established customers and a cash flow, we can get we can get that financed.

SPEAKER_01 11:28

So you could come in with a let's say owner's equity of uh the buyer's equity of just about 10% and then uh rest managing for the lender's uh SBA loan as well as the bank's uh working capital, is it still manageable?

SPEAKER_02 11:45

Yes, yes. The the advantage of the SBA loan typically is is a 10-year loan. So that can that keeps the monthly payment to relatively low. And that's of course one of the criteria for the lender is that is there enough cash flow from the business to one, pay the owner a salary and then two pay the note that they're gonna have. And that's sort of the lender's criteria. And if it meets those two criteria, sufficient cash flow, uh then they'll make the loan.

SPEAKER_01 12:16

Is there a provision for the seller taking his part of his cash, uh, which is due, after five years or after 10 years, like through a seller's note, is there's something that is very likely as a business deal?

SPEAKER_02 12:32

Well, frankly, frankly, about 65% of the businesses that we sell are are sold with summer financing, as opposed because many of the small business, due to their lack of good financial records, don't qualify for an SBA loan. Bank requires at least three years of tax returns, showing sufficient cash flow to that, then a buyer can pay the loan. And if the business on their tax returns are not reporting all that income, uh then the only option would be for the seller to provide financing. Typical seller financing is five years, time we're getting it for around 6%, or you're down payment in the neighborhood of 35-40 percent, the balance. Again, over 65% of our businesses that we sell are sold with seller financing because they would not qualify for an SPA law.

SPEAKER_01 13:23

Oh, okay. Would you be recommending for someone to look first look for a business that is available for only if it is not, then you look for starting something on your own. Yeah, yes.

SPEAKER_02 13:37

I think any anybody considering getting into business on their own should look at all three options. They should look at starting, you know, what the cost is to start one, should look at what the cost would be to buy one, they should also consider a franchise. I have corporate people who have little or no business experience, they have technical experience, but no business experience, are better off looking at a franchise because they get the support from the franchise or. So a lot of people that don't have a good business background uh are probably better off considering uh starting uh it's a new business, maybe, but it's a franchise, an existing concept. On the other hand, we we sell franchises too. Probably a third of the businesses that we sell are are existing franchises, where somebody who's had it for a number of years sells it. To us, that's just another resale of an existing business. Again, people who who lack a lot of business experience really should consider a franchise either starting new or buying an existing one. So those are options that I think any buyer, any any presumably entrepreneur who's considering getting into business, look at all three options starting, buying, or buying a franchise. Because those are really the the three ways you get into business.

SPEAKER_01 15:01

Like you talked about the franchise method of uh getting into business, because it's much less risky. But you don't have too much of a control within yourself, and the return that you're going to get is also going to be quite minimal, right? Compared to uh running a business on your own. Yeah? Well, it depends on who you talk to.

SPEAKER_02 15:23

You know, of course, the franchise owners exploit the benefits of buying the franchise. You know, presumably, presumably buying a franchise in a given industry, you'll make more money than trying to do it on your own. At least that that's their pitch, but it's not necessarily true. Two negatives of buying a franchise is one, you're locked into their system. Exactly. You can only do what they allow you to do. The other is you're gonna pay an ongoing, you pay the initial initial cost of the franchise, the franchise uh fee, and then you pay a royalty, an ongoing royalty for the rest of your life. So those are just two issues you have to consider. Uh when you're looking at acquiring a business, if you want to acquire a franchise, it's gonna be that franchise fee and ongoing royalty. But again, uh uh you're getting support that you wouldn't otherwise have. It's really uh has a lot to do with the background and experience of the person getting into business as to which of those three methods are the best way to get into business.

SPEAKER_01 16:19

Absolutely. Yeah, I agree with you. No, but sir, for a buyer who is getting into the business, you know, he's looking at a business proposal, and there are businesses available for sale, it always gives a valuation. Now, for you know, he the the buyer, of course, you know, my client now he has his own method of valuing. He has used some norms and he says this is the way I have valued it. Whereas the client, I mean the seller is asking for obviously much higher. Now there is always negotiation and they come to a conclusion and the buy-sell takes place. So tell me from your experience, how much is the margin for negotiation in this uh deal normally?

SPEAKER_02 17:08

Well, of course, it ultimately the final price is what a buyer and seller both agree to. Yeah. And you're right, it's not uncommon that sellers have an inflated idea of what their business is worth, and buyers uh sometimes make offers that are ridiculous, part because maybe they're limited in terms of their own cash flow ability to pay for a business. So there is a fair amount of negotiations going on. But you know, from a brokerage standpoint, we sell uh a significant number of our business as what we call full price, but that's meaning that we value the business reasonably to begin with. Again, every business has to have enough, make enough profit to pay the owner a reasonable salary and then have enough leftover for return on the investment and then pay any debt service that they've got. So that ultimately is the ultimately is the great criteria, of course.

SPEAKER_01 18:00

Yeah, the evaluation of the business, how do you uh help in the valuation of the business? Because there is, like you said, there is a financial cash flow, the discounted cash flow, the cost of the capital, and then you arrive at the present-day value. But again, and there are people talk about you know the thumb rules, what kind of a business, what is the Ibiddah? So so many times the bidder should be the valuation. Or, you know, they talk about say three times or four times the turnover plus the fixed assets. There are so many methods of the guidelines for valuation. So, what are the guidelines that you follow in valuation?

SPEAKER_02 18:40

Again, the business has to make enough cash flow to to pay the owner a salary and pay the a return on investment. The value of any business is either the value of the tangible assets or some capitalization or the earnings, whichever is greater. So when we value a business, or we get hired frequently to appraise businesses for people who are buying, selling, and for divorce reasons, for litigation issues between shareholders. So, but when when valuing any business for whatever the reason, the first step that we go through is what are what are the tangible assets of the business? Uh and what are they worth? So we do end up selling in some cases. We can sell a business that may not be making any money, but they've got good tangible assets. And it may be cheaper to buy those assets than it would be to start from scratch. So we we do get a fair amount of people uh who uh are looking for that type of business where they can get it, get a really buying a location that uh where they maybe the rent is is more reasonable. Existing equipment's already there. Well, that's one aspect of buying an existing business. You're really buying a location in the equipment at a substantial discount from original cost. But if it's a profitable business, but again, the the the first indication we call them indications of value, and there's various methods to do that. But the first indication of value is what is the inventory in equipment where then the other indications of value is a capitalization of earnings. Earnings are nebulous. There's different levels of earnings. And certainly eBag eye is one level of earnings, earnings is another. And in most small businesses, uh, most owners really think more in terms of discretionary earnings, meaning the total cash flow available to the elder eye is deducting some salary for the owner or manager to manage the business.

SPEAKER_01 20:28

Okay.

SPEAKER_02 20:28

So that's two different levels of earnings. And when you hear multiples, so you have to understand those multiples change depending on the level of earnings that you're using. So EBITDA earnings, for instance, you might be using multiples of three to five. Discretionary earnings are we're using multiples of one to three. We end up with the same value of the business. It's just depending on what level of earnings you're looking. And again, in most small businesses, discretionary earnings are a little easier to identify. And we don't have to guess what we're gonna pay a manager, it's just whatever's available is what they what the cash flow of the business is. There's a multitude of uh you know, the discounted cash flow methods. There's a number of methods to convert those earnings into a value. And as an appraiser, uh typically we've got to look at two or three different methodologies to reconfirm what the value of a business might be. Most of the business that we sell uh where we're using discretionary earnings, that is the total cash flow available to a roller operator, will range somewhere between one and a half and two and a half times that number. And but that's inclusive of all the assets necessary to run the business. It isn't it isn't some multiple earnings plus assets, which goes back to what some people try to use as a rule of thumb, and they will grossly overvalue the business in doing that.

SPEAKER_01 21:52

Oh, that's right, that's right. We depend from what you said so much on the financial statements. Okay. That means of course they have audited financial statements and those should be right. But looking at those statements, are there any guidelines you will provide in terms of look, these are red flags, don't consider this, get away from it. It could be pretty dangerous, risky for you to get into. Are there something that you look for in looking at the financial statements?

SPEAKER_02 22:23

Well, of course, as a broke both as a broker and as an appraiser, those are critical, critical elements. We have to be able to read tax returns, financial statements, uh, and and then try to verify to their best of our ability. We're not auditors, but we can't audit somebody's financials. We try to at least look to see how they how they report and what's the validity of the numbers that they're providing. Actually, sometimes we do get owners who are are falsifying their records. So you've got to be somewhat careful of it. A lot of small businesses, they find creative ways to to expense personal expenses through the business. And so that takes a little more investigation in terms of was that a real business expense or was it a personal expense? And those are what we call adbacks to discretionary earnings, is if we if we identify expenses that the owner has one of the benefits of running a small business is that you can run a lot of personal expenses through that business and it saves you tax dollars. Okay. But exaggerate that that issue and run a lot a lot of personal expenses that shouldn't otherwise be there. But it's one of the things that we look at both from a broker standpoint and appraiser standpoint is to what extent has the elder who run personal expenses through the business?

SPEAKER_01 23:38

But you know, subsequent to coming into a broad agreement and signing an MOU, you'll go into due diligence, right? At that time you have an opportunity to go through the records minutely.

SPEAKER_02 23:51

Yes, anytime we put a business on the market, we've gotten tax returns, we've gotten their financial statements, and to the best of our ability, view those and and and determine the level of earnings that that business makes. Now, again, we don't guarantee it uh because we're using records that were given to us by the owner that may have come from their accountant, but the accountant was only reported what the owner gave them. It's important that when somebody looks at buying an existing business, that they uh they get those financial records, they analyze them, and any questions they might have they need to get answered to of what expenses are critical to run the business and what expenses might be considered discretionary.

SPEAKER_01 24:31

That's right. What do you advise, uh Jeff, when somebody should be approaching a broker organization like yours, and then he should try to do on his own? Is there any guideline as to above certain value? It is a little more risky, so you better approach a broker. Or or what would be the benefit that will come to him?

SPEAKER_02 24:53

Certainly, somebody looking to acquire a business has got an option. You can go knock on a seller's or a business owner's door and say, hey, do you want to sell? And if they think you're a rich idiot, uh you know, they're gonna throw out a number that usually is eight times higher than what it should be. It's difficult. Our job is to find business owners who want to sell. Uh so we can get a listing. I've got to talk to 10 business owners to find one who would at least consider selling. So finding a business owner ready to sell is a difficult task. And from our brokerage standpoint, probably the biggest time consumption of of our industry is the search uh for business owners who are ready to sell. Everybody will sell at a given price, but oftentimes that price is not realistic. And frankly, the unfortunately, the the value of most small businesses is really not great. So it's not enough to make most business owners sell. For a business owner to sell, there has to be some strong motivation to sell. They have to have health issues, they have to have uh sort of financial problems or some reason that that that encourages them to sell. Maybe retirement is certainly another one. Uh if if that seller, if that business owner doesn't have a strong uh interest in selling, the price will never be reasonable because that owner can can keep his business, make the same amount of money in two to three years, and still have the business. Whereas if he sold it, you know, he's only going to get a couple of years' worth of earnings up front. Unfortunately, a lot of businesses never sell because they they don't make enough money or they're not able to find the right buyer, they just shut down and go away. Again, the the there has to be the one of the critical elements when when talking to a business owner is is why do they want to sell? Their reason for selling is to make a bunch of money. That business probably will never sell. So the seller has to be motivated. Using a broker, at least uh you're you're dealing with a business owner who's already indicated an interest in selling. So you haven't had to to convince somebody to sell their business. Two, dealing with the broker, they've gotten all the financial information up front. It's uh it's always a little surprising to me. Don't have current financial records. You know, maybe they haven't filed a tax return in several years. Or they don't, you know, we're we're we're in September and and they haven't filed any statements uh since last year. Part of our job is to encourage the elder to get that information so that when a buyer comes to our office, we have it. That's a a major issue that when buyers on their own are trying to deal with the seller. The seller's not ready, hasn't done a lot of planning ahead of time, but doesn't have good financial records up front, uh, and frankly hasn't hasn't used a standard method for valuing their business. It just happens to be a number they want. Dealing with a broker, you're typically going to get a a business owner who's motivated or where there's financial information available to look at, okay, and be able to much quickly, more quickly, make a determination as to whether it makes sense to buy.

SPEAKER_01 27:57

So normally, is it the case that uh you have a list of sellers who want to sell the business, and a potential buyer will approach you, or you will approach a potential buyer offering the business for sale. Or is does it work the other way around? The buyers say, Look, I want to buy a business, and look, I have a proposal here. Would you help me evaluate and negotiate? So, do you work in that direction also?

SPEAKER_02 28:25

Well, I think on the brokerage side, uh, we primarily work with sellers. There again, we with it's that's that's our listings. That's that's what keeps us in business. Uh uh, we typically don't represent buyers in that respect uh because they don't know what they want most of the time. Just very difficult uh to find a business for a given buyer. The the now from score where I'm doing score counseling, it's not uncommon that buyers or entrepreneurs will come to me uh where they've already found a business and they want help analyzing it. Yeah, uh, and and maybe structuring a deal. That's what we do as score counselors.

SPEAKER_01 29:06

Okay.

SPEAKER_02 29:06

There's where I work with buyers where they've already found something exactly and and they want help in terms of analyzing it and structuring a deal. There we can be a big thing.

SPEAKER_01 29:17

I've noticed that when clients come in saying that they have found a business and they want us to evaluate, there is a broker associated with the seller always. So they communicate with the broker for the seller. So, from what you said, which is true, most of the sellers will have a broker. That's how the business is conducted.

SPEAKER_02 29:40

Yeah, confidentiality is so critical. It's difficult for a business owner to handle the seller himself. He has to run his own ad, he has to disclose who and where he is. When he somebody calls you an ad, he's got to tell them who and where you are. Uh when I have when I advertise the business for sale, we don't tell a buyer who it is or where it is. They have to until we have all their information. Oh, and they've signed a confidentiality agreement. We help sellers significantly because there's a lot of buyers out there, a lot of buyer, what I call buyer prospects, uh, who will never buy anything. They they just they look they look and look and look, waste everybody's time. And so a a business owner would prefer using a broker who do who can do all that qualifications and bring to them people who are serious.

SPEAKER_01 30:26

One uh one of the last questions, but what is a normal charge the brokerage, you know, can access fee from the seller. What is the structure of the brokerage fees?

SPEAKER_02 30:37

Typically, a a broker's fee, and it's considerably different than real estate. We're in real estate, and the fee is really in the in the in the 6%, 5%, 6% range. Typically, in a in a business under a million dollars, a broker's fee is going to be around 12%. And and a again, a big significant difference between real estate and business brokerage. Brokers typically don't co-op with other brokers. Broker is getting a working directly uh with the both the buyer and the seller. The buyer doesn't need to go get their own broker uh because the uh the the broker representing the seller has all the information that ultimately helps structure the deal. Now the the buyer certainly has the option of uh using a score counselor, in this case me in many cases, uh or their own accountant or their own attorney uh to provide with provide advice, but they don't need another broker because typically brokers don't co-opt. As in residential real estate, uh almost all deals are co-opt.

SPEAKER_01 31:39

Yeah. So the seller has to pay the broker on conclusion of a deal, or he pays something up front, or how does it work like?

SPEAKER_02 31:48

Well, in our in every brokerage company is a little different. So we've got two fee arrangements uh where they pay 12% of closing only. It's what we call a contingent sale, whereas you don't pay anything up front, but a closing, they're gonna pay 12%. Offer a nine, what we call a nine percent plan, uh, where they pay one percent upfront and then eight percent of closing.

SPEAKER_01 32:09

Okay.

SPEAKER_02 32:10

So for an owner that wants to save a few dollars, yeah, taking that second option. That's it. But but then of course they run the risk. If the business doesn't sell, they pay that money up front. So we give them the option. That's up to the business owner as to how he wants to do it. So in general, fees for brokeraging of a business runs somewhere between nine and twelve percent.

SPEAKER_01 32:29

But if to make the deal possible, you found a buyer, but do you also help him in getting the loans from his BA and other lenders?

SPEAKER_02 32:41

Yes, uh 60, 70 percent of the time is the seller is providing financing, so it's a seller note. The business does qualify for the SBA loan. We frequently help the buyer. Okay, the banks keep in touch with us all the time. They know we do deals, uh, will constantly send me emails making me aware of of their program. Uh, when we get a buyer that that needs an SBA loan, uh we can recommend uh several banks that they can go to to get that loan.

SPEAKER_01 33:08

Beautiful, Jeff. I don't want to take you for more of your time. It was very informative for me. Thank you so much for coming on to the podcast, Jeff. Well, thank you. I enjoyed it.

SPEAKER_02 33:21

Hopefully we've given some people some good information. Absolutely. Pleasure.

SPEAKER_00 33:28

Thanks for listening to Mentor Conversations at Score Houston. If you're an entrepreneur or small business owner, we'd love to support your journey. You can reach us at 713-487-6565, or visit us at 8701-South Gestner, suite 1200, Houston, Texas, 77074. Our office is open Monday through Friday, 10 a.m. to 2 p.m., except for federal holidays. Log-ins are always welcome. To learn more, to request free mentoring, or to register for workshops, visit us online at score.org slash Tuesday. Until next time, keep learning, keep growing, and remember, at Score, we're here to help you thrive.