Episode Eight: Financing Law Firm Acquisitions with SBA Lending Expert Weston Holley

Thinking about buying a law firm but unsure how financing works?

In this episode of The Exchange, Tom Lenfestey sits down with Weston Holley, Vice President of Commercial Lending at United Midwest Savings Bank, to break down how SBA financing is helping attorneys acquire, expand, and grow law firms with greater confidence.

From first-time acquisitions to multi-firm roll-ups, this conversation explores what lenders actually look for, how deals are structured, and why preparation can make the difference between getting approved and missing an opportunity.

Whether you're planning your first acquisition or building through strategic growth, this episode provides practical insights into one of the most important pieces of the transaction process.

They cover:

• How SBA lending works for law firm acquisitions
• The difference between SBA and conventional financing
• What buyers should do before making an offer
• Deal structures, seller financing, and escrow agreements
• What lenders evaluate before approving a loan
• Common mistakes that slow down financing
• Financing multiple acquisitions and firm expansion
• Why pre-qualification strengthens both buyers and sellers
• How commercial real estate can impact deal structure
• The biggest green flags - and red flags - lenders see in acquisition deals
• How financing supports succession planning and long-term firm growth

Weston also shares practical advice for attorneys looking to enter the acquisition market, explains why preparation starts long before a purchase agreement is signed, and offers insight into how financing can become a strategic advantage - not just a source of capital.

Connect with Weston Holley

Email: wholley@umwsb.com
Website: www.umwsb.com

Learn more about The Law Practice Exchange:
https://thelawpracticeexchange.com

#LawPracticeExchange #LawFirmSale #LawFirmAcquisition #SBALending #LawFirmGrowth #SuccessionPlanning #TheExchangePodcast #LegalIndustry #LawFirmOwners #ExitPlanning

Transcript

SPEAKER_01 0:12

Hello, everyone, and welcome back to The Exchange, the podcast where we're talking about buying, selling, building law firms, investing in law firms, MSOs, all the things in between that really is the movement of the marketplace for law firms and how to create exit strategies or acquisition strategies. I'm your host, Tom Linfesti, and I'm excited today because today's topic I think will hit really home for a lot of people planning for exit, looking for acquisition or otherwise. And it's about financing your law firm acquisition. So today's guest, uh we have Weston Hawley, a specialist in the SBA lending for law firm acquisition space. And I'd love to get into it. So first and foremost, Weston, welcome. But you're a VP of commercial lending at United Midwest Savings Bank. But I'd love to get into give me your story, give me your background, and how do you get into going from, you know, maybe where you started years ago to a specialist in SBA lending? Because I think, you know, that's kind of a niche space, just kind of like ours. So a little bit about your background and how you got there.

SPEAKER_00 1:18

Yeah, absolutely. First of all, Tom, uh sincere gratitude. Thank you for having me on. Uh, you know, it's an absolute pleasure to be here. Uh, so a little bit about myself. You know, I've been in the, excuse me, I've been in the SBA world now for about eight years. It really got my start uh at the time was the nation's number one SBA lender. I started uh, you know, if you look at the loan cycle, I started on the back end, meaning the loans closed and I was on the loan servicing size. Pretty entry-level, very fortunate for that to really be a sponge and just uh absorb as much uh information from the SBA, um, the loan process. And so I was in deposit ops. I did that for a little while, mastered that role, and then looked to take on more. I moved over to the business analyst side, which is where we really started looking at the financials of businesses, PLs, balance sheets. We we did quarterly analysis, really understanding how the business operates and what makes the business tick. In addition to making sure that the business is trending and able to make their payments back to us. So once I mastered that, was that that's a good thing, right? Yeah, absolutely. That's always a positive, right? Good start. Uh so once I mastered that role, uh I wanted to transition to the front end of the loan cycle. And so I moved into underwriting to really get a grasp and understanding as far as credit, credit policies, you know, the SBA policies, deal structures, which I'm sure we'll get into later, and just what really makes a good loan. So I did that for about four, four and a half years. And then during that time is actually when I met my my mentor and and now colleague, uh Shannon Hay, who who really saw my drive and knowledge of the SBA product and and SBA program. He's been in tax and accounting and professional services for you know, maybe close to my lifespan.

SPEAKER_01 3:07

Yeah, I think I first met Shandon in my early years of law practice exchange. So he's been out for a while for sure. Yes.

SPEAKER_00 3:14

Very knowledgeable, you know, very well known in the industry. So he approached me and and said that he was starting the uh tax and accounting vertical at United Midwest Savings Bank. And uh so I I joined his team and it's it's been uh an absolute pleasure. You know, we're we are proud to say we've been credited as the number one SBA lender in tax and accounting for the past two years. And it's uh it's it's been awesome. And we're really looking forward to uh to making some awareness about us and what we can do as far as being an asset in the law field as well.

SPEAKER_01 3:46

Hopefully we can pick your brain on some of those comparables and everything else. But let's start with this, right? And really what we're talking about today is, you know, maybe you have a deal, like you're looking at exiting as an owner of a firm, anything else, or maybe you're looking at, you know, buying a firm, acquiring. And so, Weston, you would be the go-to, you know, that we would send um, you know, these attorneys to to talk to about, you know, if you want this deal financed. But I just want to ask you, like a lawyer comes to you, like we've sent, you know, some lawyers to you or anything else. How does that first conversation go?

SPEAKER_00 4:20

Great question. It typically always starts out with how do I know what I'm buying is going to stay put, right? Uh, because you know, what what are we financing here at the end of the day? Essentially it's goodwill. So there's there's there's no real hard assets that we can really collateralize the loan with. So that's really the first question, and which really leads us to deal structure and how we can kind of give some comfort for the buyer to really utilize structuring the note or letter of intent purchase agreement that that revenue is still going to be there, you know, one year, two years, three years after the closing. That seems to be the common theme or common question right off the bat is how do I know that the clients aren't just going to leave as soon as we close? So, what typically what that that leads to is you know, deal structure, as I said. What I inform them and what what I like to present is when you're when you're presenting your letter of intent, go ahead and include in the transition period. The SBA route does allow the seller to stay around for a year post-closing as long as they're in a non-key man role. So, right there, you already have one year that you're gonna have the seller to help provide a smooth transition. In addition to, we can utilize seller financing to kind of have some skin in the game, if you will, the seller's still waiting to get paid. Um, and and what we have been utilizing a lot lately, which seems to be very attractive, is instead of seller financing, we we present an escrow agreement. Meaning the escrow agreement, we're still gonna fund the full amount at closing. So you're utilizing our 10-year term versus the very short amortization of a seller, seller note. However, we're gonna set aside a portion that you and the seller agree upon and maybe have some revenue metrics or attention, you know, metrics tied to that. Meaning year one post-close revenue hits this, we're gonna fund you the full amount. If uh revenue doesn't hit, then we're gonna fund the lower amount. Right. And what's what I think is beautiful about that, you know, scenario is if if the revenue is not met, the leftover funds from the escrow is gonna be a direct payment to us, you know, is a pay down on your loan. Loan reamortizes, and now you have a lower monthly payment.

SPEAKER_01 6:35

Sure. I think that's you know, it's a huge point, Westin, because I think, you know, those first conversations, let's just take as an example, there's a million-dollar practice, right? It's got a million-dollar price tag. And I think that's the part where I really have always taken the position that deal terms matter more than purchase price. Well, let's back up a little bit for those that um maybe aren't familiar with SBA lending, right? Anything else. So from an overview, you you guys, you are bank lending, you are funding, you are creating that loan. But give me kind of the basics, the higher view. You know, we don't have to go. I know the the rules get pretty in-depth, good government, you know, regulations, everything else. But just how the SBA structures typically look and how those eligibility requirements work.

SPEAKER_00 7:23

Yeah, absolutely. So first-time acquisition, it's a hard and fast rule. There's a 10% equity injection requirement. Um, there are ways to, again, structure that that, you know, if someone doesn't have the full 10% to put down, we can utilize seller financing. You know, the rules do change within the SBA periodically. Right now, the seller can hold 5% of the 10%. However, that 5% does need to be on full standby, uh, which for our loan would be, you know, 10 years.

unknown 7:54

Yeah.

SPEAKER_01 7:55

And just to summarize that piece, buyer, you know, if it's a million dollar loan again, right? You got to come with $100,000. If you have $100,000, there's ways to decrease that, but you sell her to kind of wait on part of that payment or anything else. So really it's that 10%, you know, capital. So you can buy a practice for a million dollars with a hundred thousand, right?

SPEAKER_00 8:16

Yep. Exactly. Okay. And uh, you know, when that that rule first changed that the seller had to, you know, hold five for the 10, the full 10 years or the full term of the loan, it's like no seller's gonna agree to that. I'm actually surprised to see that there's there's been several sellers that, you know, as you said, that are willing to do so.

SPEAKER_01 8:33

So well, I think, you know, again, when they're getting more upfront by using an SBA funded, you know, purchase, um, they can give a little bit because a lot of deals are like, would you rather have a seller note that's gonna just hold you out there for you know a longer period of time, or would you like to get this bigger chunk now? And so I think it makes it work if they're confident with the buyer, right? They like the buyer, everything else, and kind of see how that can work. Absolutely.

SPEAKER_00 8:58

Right. Yeah.

SPEAKER_01 8:59

There. All right. So next steps, right? That 10% requirement, otherwise, but we're talking about a 10-year loan, correct? Typically?

SPEAKER_00 9:07

Yep. So if it's a street acquisition, it's going to be a 10-year term, 10-year amortization. If there is commercial real estate involved, which we do see time to time, we can utilize a 25-year term. Now there is a little bit of stipulation there. And I have a great example that came from a referral source from you, Tom, in the law of practice exchange. I had a caller, uh, you know, wanted to get their business pre-qualified and essentially, you know, figure out what the best package they could take to market was. And uh, you you discussed this in a in a in a prior podcast. You know, when you're trying to get multiple offers or really want that best offer, you really need to have a very attractive package. And this directly relates as this particular person was looking to sell their firm as well as commercial real estate. So I explained to her the kind of ins and outs, and it comes down to if the commercial real estate is 51% of the package, meaning commercial real estate's 51%, the the practice acquisition is 49%, then we can throw that entire uh that entire loan on a 25-year term, which is huge. I mean, that's very attractive for a buyer. You know, it's a very low, you know, a lower monthly payment versus, you know, a conventional loan, you're only looking at, you know, maybe 10 years or something of that nature.

SPEAKER_01 10:34

Yeah, if that long. And I think that's that's a key part where it works. And of course, a lot of the professionals that you deal with in accounting and law and that we deal with in law, they do own their real estate office, right? And so for them, you know, I will say, especially depending on the the scale or size of the practice, sometimes they have real estate they bought a long time ago, and that real estate is appreciated, and maybe it is worth more than the practice, right? And so an opportunity for them is to package both. So take me through traditional loan versus an SBA, just kind of on a comparative aspect. What do you think the biggest difference and maybe benefits, especially for this world of law firm and a you know professional space, of using SBA versus traditional lending?

SPEAKER_00 11:19

Yeah, that's that's a great question. I mean, really, if you think of conventional lending, your the requirements to bring in are typically around 20, 30 percent. Um, SBA, as I noted, acquis first-time acquisition, it's only a 10% injection requirement. You know, in addition to that, the SBA isn't just for first-time acquisition. You know, they do have expansion products where we can finance 100% of the transaction. So that in itself, if you're an existing you know, uh owner operator, that's that's huge. You know, you can finance uh an expansion without putting a penny in it. So, you know, that's really you know the main heavy hitter, I would say. Uh as well as the terms as we just discussed, conventional is acquisitions is like three, maybe five year terms. Whereas us straight acquisition is is ten years. So that really lowers your monthly payment, as you just uh just touched on Tom. A longer term, longer amortization means a you know, a lower monthly payment, uh, which opens up cash flow and all other things for you.

SPEAKER_01 12:24

Yeah.

SPEAKER_00 12:26

There's a lot of perks to the SBA program compared to conventional lending for sure.

SPEAKER_01 12:31

And then SBA really is meant for what size, you know, kind of deals, like lending. Where's the ceiling? Where's kind of the floor for you guys typically?

SPEAKER_00 12:39

Yeah. So for us, we we utilize the S7A program. So five million is going to be uh the cutoff there. You know, really there there's there's no minimum on that. We do have two teams at our bank, 150 below would be considered the small team, 150,000 up to 5 million would be with us, the considered the large team. But there's yeah, there's no minimum there for that, just a cap of 5 million.

SPEAKER_01 13:03

And just from structural, I think a lot of people probably think, you know, if I go get a loan, like I'm set with you guys, because that's a lot of traditional banking. It's like if you have to, you know, go back through. But let's say a buyer's out there, they buy a practice, and then, you know, in a year they find another practice they want to buy and they want to come back to you fully can, correct? They can just repackage it, go back through it. It doesn't, they're not locked in, right? It's not like they have to pay off the first loan before coming back, as long as everything's healthy and good.

SPEAKER_00 13:32

Great question. Um, and and the answer to that is is they absolutely can come back to us. No, they do not have to pay off their first note. We actually do kind of pride ourselves as multi-acquisition specialists. I do know there's a lot of lenders out in the space that kind of sell the dream and then we'll say that this is too fast too soon, right? You know, for us, but you know, speaking from experience, and an example, I have a borrower that just closed his fourth loan within the past two years. So really what it comes down to is, you know, does the debt service still make sense and does the narrative still make sense? Um, you know, as long as those are are are still checking the boxes, we absolutely can still finance that, whether it's uh, you know, five months after your initial acquisition or uh a year past your acquisition.

SPEAKER_01 14:20

Absolutely. Because I I think right now we've got a lot of interest in, you know, the roll-ups, right? And so it's, you know, whether it's a law firm or otherwise, like really looking at, you know, wanting to do more of these. And so that's a relationship that can really look to you guys to do that.

SPEAKER_00 14:37

Yeah. Yeah. So really it's uh one, just kind of uh explaining our process. One, uh, you know, start to finish time frame, how soon are you looking to close? Uh if there's a you know, a time frame that you a deadline you have to meet, it's pretty important. So I'll go ahead and discuss that up front. Um, what that looks like for us is typically it's a 45 to 60 day start to finish process. Um, you know, I'll explain to them what documents we will need up front. Uh, you know, three years personal tax returns, three years business tax returns for the subject business you're looking at, as well as if you currently have a practice itself. In addition, our our application, maybe a profile on the subject business you're looking at. Once we get all those documents, I'll do a uh very, very brief initial spread to make sure that you cash flow is there and this looks like something that we can get behind in in overall finance. At that point, I will issue them terms, they agree to that, put them into underwriting. Underwriting's typically about a week. And then we'll uh have an approval within the week, send them the commitment letter, they sign, they move into closing, off to the races to absolutely. And I do get questions a lot about, you know, do I need to look at getting a Q of E myself or, you know, in and explain to them that, you know, as you just said, I'm gonna look through this, you know, very detailed. Uh, you're also gonna go through full-blown underwriting. They're gonna fine-cone everything and see if anything stands out or doesn't make sense. In addition to, it's a requirement from the SBA, the Small Business Association, that we get a third-party business valuation done as well. So, really, when you look at it, there's three levels of us valuating and really looking at the practice and making sure that you're getting a good deal here and something's not out of line.

SPEAKER_01 16:27

Perfect. And that segues nicely into like pre-qualification.

SPEAKER_00 16:31

Yeah.

SPEAKER_01 16:32

Explain from a seller and a buyer side what pre-qualification looks like for you guys. And really, my question is like, is it worth it? Is it truly a value to do that early in the process versus waiting until later?

SPEAKER_00 16:44

Yeah, absolutely. I think it's it's it's beneficial to start the process as soon as possible. Uh, you know, I'm a firm believer. If you're looking to acquire 12 months from now, go ahead and start the conversation, right? You know, figure out what you need to send us and you start the process as far as what can I expect again, time frame. But as far as pre-qualification, we're a historical cash flow lender. Meaning, you know, we're our approval is largely based on the historical cash flow of the subject business. So as soon as we can get the tax returns or at least the financials of the business as you're looking to purchase, that's really gonna ultimately kind of give us the the yes, we're gonna be able to do this, or no, it's it looks like it's a stretch. We analyze that in two different scenarios. One's gonna be just the subject business, the core business, up against the new debt. If that checks it, then we move on, you know, checks the box, we move on to the next one, which is gonna be the global standpoint. You know, that's really gonna be the borrower's, you know, all liabilities for the borrower and as well as well as the new loan, including the, you know, the business. As long as that all is meeting our debt service coverage requirements, then you're you have a great chance at being approved. We are going to look at your credit and we are gonna look at your personal financial stance. Those may factor in a little bit, but again, the large piece is the historical cash flow of the business you're looking at purchasing.

SPEAKER_01 18:10

Well, I just think it's huge, you know, our encouragement always the where we try to connect is if you're a seller and you're going to market, you know, and if you're listening on our marketplace or we're working with you otherwise, like going and getting pre-qualified just lets a buyer know, like, I'm serious and I've pre-packaged this even further, right? And if you're a buyer and you're showing up and like, I've already been pre-approved, you know, Weston's my guy and he's already pre-improved me for, you know, uh, you know, $2 million to buy this firm, it just gives the seller like, we need to talk, right? Like you up in priority of buyers when you already have put that level of prep and effort into it. So we already talked about a little bit of deal structures, right? Everything else. But anything else as far as like where you typically see, like is there a typical, you know, is there a typical loan package deal structure that you really see or that you guys really like? You kind of mentioned the escrow, but overall, whether it's in the accounting right now or the law firms that you're seeing as far as split, meaning cash down or no, you know, escrow, otherwise.

SPEAKER_00 19:16

Yeah, you know, the end of the day, the SBA requirements obviously have to be met first, you know, meaning if it is first acquisition, you know, 10% does need to be put in. Do we like to see more? Absolutely. I mean, more skin in the game only gives us comfort that, you know, you're you're very serious about this, you're gonna make this work no matter what. Is that a requirement? Not by any means, but that is something that we would like to see, and and also, again, just provides comfort in our credit team. Collateral standpoint, the SBA doesn't require any any liens filed unless your loan is above $350,000. So again, if you're both if your loan is below $350,000, we're not gonna require for a lien to be to be filed. We do like to see that again, we're gonna look at your personal financial stance. And if you have some properties and some more funds in the bank, again, that's only gonna give us a little bit of comfort. But it again, it's it's not a requirement by any means that we're gonna need that.

SPEAKER_01 20:17

Right. But how do you get comfortable, like in that underwriting aspect, like those questions, the business plan, otherwise, like how do you get comfortable really lending on the goodwill of a practice? What are those, what are those like drivers up or kind of those negatives down?

SPEAKER_00 20:31

Yeah, and you that there's a that is a a question that I do get quite a bit in as far as the initial conversations. Um, you know, a little worried about, you know, there's not many hard assets here at quadriles alone. Can you finance this? Um, the answer is yes, we can do that. And really what gives us comfort in that is tax and accounting, for example, there's certifications and licenses that that need to be obtained to be able to run these practices. So that tells us that this is a you know, intelligent individual that can get this done, as well as he has the you know credentials to to back it up. Uh, same with law, right? In addition, we analyze the business that they're looking to buy. And let's just say that the client list, for example, if it's a practice where clients really have, you know, their longest standing client is maybe a year, it's gonna be a little tougher for us to find comfort in financing that versus a practice that maybe has a client list that's you know averaging 10 years and plus, right? You know, we can count on that that recurring revenue from those individuals. So those are we you we can tap into those. And again, the SBA guarantee is largely gonna play a big part as far as giving us comfort, you know, on on just the goodwill. Sure.

SPEAKER_01 21:49

Absolutely. What separates deals that really go smoothly versus those that just hit roadblock after roadblock? Like what are those factors from whether it's seller buyer side, anything?

SPEAKER_00 22:00

I would say what we discussed earlier. Start the negotiations as soon as possible. If you have, you know, if you've already discussed with us and kind of got a package together, that's only going to streamline the process. You, you're, you know what to expect. You know the stages of the loan cycle. You know, versus someone that pops up and says, hey, I need to close next month, haven't started any of it. There's probably going to be some hiccups along the way. But, you know, we're going to try our best to meet that deadline, but it's just not as smooth sailing as someone, you know, as you said, that get pre-qualified and have those conversations from an early standpoint.

SPEAKER_01 22:35

Yeah, you know, we try to be really big on putting the team together, like early. Like not before a transaction, whether your buy side or sell side is like right there. Are you good with closing out with some rapid fire questions? Let's do it. All right. I'll I'll throw up some easy ones, ready? Easy one first, maybe. SBA or conventional. Which one would you use if you're buying a law firm?

SPEAKER_00 22:58

100% SBA. It's funny because my wife and I talk a lot now that I'm very familiar with the SBA. We look at businesses all the time and it's like, well, we only got to put in 10%. Yeah. So let's let's yeah, let's talk about this. That's right. Versus could, you know, again, conventional, it's 2030.

SPEAKER_01 23:15

2030, shorter term, right? And they work for a lot of deals, right? And there's certain things that those aren't going to be eligible for SBA or otherwise. But overall, I think when it's a goodwill practice, it just makes a lot of sense. Um biggest green flag you've seen in a buyer's application. So you get a buyer coming in and they're submitting that. Like, what is that thing that you're like, yes, right? Like as an underwriter or now on the front side of things that you're super excited about.

SPEAKER_00 23:43

Existing practice, drop in, you know, big bucks to the bottom line. That's that's what we love to see.

SPEAKER_01 23:50

Yeah. So you're talking proven operator, right? They already got their law firm. They've strategically looked and said, hey, you know, this is a geographic market we want to go into. Um, we know how to run a firm. We've got the financials and history of success to do it. Yep. You as a lender are like wonderful.

SPEAKER_00 24:08

Yes, absolutely. You've proven yourself, but you know, the revenue that you're you're pulling in, the profits you're pulling in. I'm not too worried about the debt service coverage. It's probably gonna probably cover that. So yeah.

SPEAKER_01 24:20

Well, I assume I can guess on this, but what's the biggest red flag then?

SPEAKER_00 24:26

Right now, um, I would say what we're seeing the most, and this is kind of unfortunate, this is due to the SBA changing policies. If if if you're not uh a hundred percent a citizen, if that box is not checked on the application, that unfortunately that's a big red flag for us. We can't move forward with that. Um potentially the uh you know the SBA is gonna change that rule in the near future, but right now that's that's a hard and fast stop for us.

SPEAKER_01 24:53

You know, hopefully that's changed soon and we don't have to we're not Yeah, and we've had I know we've talked before, we have some cross-border ones in Canada and otherwise. And so for us, it's always, you know, you gotta then locate that funding. It gets a little bit more difficult, but SBA is there for a purpose, and if you, you know, can fit into that eligibility, it's a great, you know, kind of platform to have. How fast can you guys get a deal done? I'm gonna I'm gonna take the assumption that the buyer has pre-qualified with you, right? So you've got comfort with this buyer. They bring you then the deal and said, here, I've got this LOI signed. What what's the typical or how fast can you guys move from there?

SPEAKER_00 25:31

I don't want to say a number and that be, you know, the expected standard, but what I will say is I have closed a loan once it went into closing in 15 days. Now, uh that's again, that's not just myself. We do have a great team in in in closing and underwriting here at United Midwest Savings Bank. The the borrower came in well prepared. I got everything needed, got them into underwriting, quick approval. Once they were in closing, they closed in 15 days. I think all said and done, it was it was about a 20, maybe 25 day process for them.

SPEAKER_01 26:04

So I think that's one of the biggest things of like, you know, sequential, like having a relationship, right? If you're gonna do roll-ups, like you guys already have the success story, you have the financials, you can hopefully get more comfortable, you know, as we go. Okay, another question. Banker or lawyer, who's harder to negotiate with?

SPEAKER_00 26:22

I would say a lawyer.

SPEAKER_01 26:25

Depends on if they're, you know, banker on the collection side, right? No, I'm just kidding. Yeah, I'd probably agree. But the overall aspect is, you know, on that note, I think that's part of where we said West and his team can be such great advisors to deal structure, is because if you are a lawyer trying to negotiate your own deal, it's great to get, you know, other, you know, you know, other advisors involved to just basically say, hey, look, this is an okay deal or this is a great deal, or this is where you need to come back and really help through that and everything else. Have you ever told someone not to buy this firm or this practice?

SPEAKER_00 26:59

I've never said those words verbatim, but but yes, I have, you know, at the end of the day, we're gonna look out for our borrowers. We want them to make a great purchase, but you know, to follow that up, we're also looking out for the bank as well, right? So we're we're not just gonna finance alone, just a finance alone. If there's something early on that, hey, this isn't making sense, we're we're gonna call that out, you know, by all means. Um, you know, I'm never gonna tell someone, hey, don't buy this, but I am going to say that there's some stickiness here that I think we need to figure out and get a true understanding that, you know, what's going on with these financials. If you're okay with that and, you know, want to move forward, we certainly can do so, but we're gonna need a, you know, re explanation from you saying that, hey, I'm I'm good with this.

SPEAKER_01 27:46

What's the one thing you would tell lawyers out there looking to get a loan, right? Or you know, pre-qualify their firm that they should start doing now and go ahead and prep, that would just make the world easier on the financing side of things.

SPEAKER_00 28:00

Yeah, I mean, it it really, if um, you know, depending on how soon they're looking, again, give me a call. Let's let's get those conversations started. But, you know, again, really starting to think about what that package is, you know, as we talked about earlier, Tom. Um, you know, another example given from uh the law of practice exchange referral, a seller was really trying to put together a good package. And I explained to her the SBA expansion product. She had a buyer in mind who already had operations. And I explained to them that, hey, SBA isn't just for first-time acquisitions. You know, we can finance 100% of that for him and he doesn't have to pay a dime. At first, it it almost seemed that she was, well, I think he might be a little too prideful to work with the SBA because it's not a first-time acquisition. But as soon as I started explaining that we can do 100% of that, it it really started since her ears opened up and said, you know, that's a good, that's actually a good package to present to them for it. So um I would definitely say, you know, understanding the package, what you're bringing to market, and just starting those negotiations early, those talks early.

SPEAKER_01 29:05

Well, before we close out, I do want to kind of talk about similarities because you've been, you know, funding and in the professional practice world for a long time, specifically because it's been a more established market in accounting and CPA practices. It seems, at least for my take of kind of watching both industries and everything else, that law is following suit. And I've had lots of conversations, Weston, with lawyers recently who have law firms, but they're looking at our brand for our firm is this. But we'd love to have another law firm and acquire something, but it just doesn't fit into our current. So they've formed an MSO or are looking to form an MSO. They can still come to you for financing, I assume, correct? For those acquisitions.

SPEAKER_00 29:50

Yeah, for tax and accounting, I personally have not seen that that structure. Typically, what we see is you know, there may be a new entity created for the expansion. But yeah, as far as I'm aware, MSO structures are are fit the mold as well. Now, keep in mind anyone that's within in that that has 20% ownership would have to guarantee the loan. And so that is a requirement from the SBA. So that could create uh, you know, multiple guarantees on the loan. But but as far as you know, say a tax and accounting, I have not seen that structure yet.

SPEAKER_01 30:22

And where have you seen accounting go as kind of an overall market, right? Say over the last five to ten years.

SPEAKER_00 30:30

Now, again, it is a bit seasonality or does have some seasonality to do with the tax season. Uh the deadline just happened, so we're starting to see it ramp up already. Private equity has been in the space that's driving multiples up. I would say our typical deal size is a lot higher than it used to be, which kind of gives me the understanding that these accountants are seeing what's going on and they're kind of cleaning up their practices and getting ready to sell in the years to come. So whether they're looking to go the PE route and just get as much cash as possible and go enjoy vacation, or uh there's still some that still really care about, hey, I've built this from you know, the bottom. I've put a lot of blood, sweat, and tears into this. And I still go to church with half my clients, you know, even after closing. So there's still some that that really want to see just a good buyer in there versus the private equity come in and what happens happens.

SPEAKER_01 31:24

Yeah, I think that's the biggest thing we've kind of talked about in law, you know, private equity coming in, they are one type of, they're really an investment partner, right? You know, they're not, you know, truly an acquirer, but it's one new option that maybe wasn't in the market, you know, a couple of years ago. All right, I said last question, but I got one more. So that's that leads to, because you said it, it leads to you guys can also help loan for growth. Just overall, like, you know, law firms that want to say, look, I want to invest in our own growth and carry that forward. I'm not looking to acquire something. I'm not looking to, you know, sell right now, but I just need capital to grow, they can contact you.

SPEAKER_00 32:05

Absolutely. Yeah, we can do uh just a simple working capital loan. Um that you know, you don't have to, as you stated, acquire another business. Uh, we absolutely can help that out. And, you know, please, by all means, if that's what you're looking to do, give us a shout. We'd love to love to help you out.

SPEAKER_01 32:20

All right. Last question. I promise it's an easy one. Where can people find you?

SPEAKER_00 32:25

Um, my email address is going to be W H O L L E Y at U W M W S B dot com. And, you know, I'll even get my cell phone out if that's allowed, Tom. Uh by all means, give me a call and yeah, 910-470-7701. Uh the way I operate, I'm on my phone 247. If I don't answer immediately, I'll call you right back.

SPEAKER_01 32:50

So Yep. And we'll put, you know, again, we've got your guys' contact. We'll put that in the show notes and kind of carry that forward. Weston, I greatly appreciate you taking the time. I know you guys, especially coming out of tax season, like things really kind of, you know, ramp up for you quickly. So I appreciate you taking the time. Give the best to uh Daniel and Shannon for me. And right, because overall, if even if you're not looking to do a deal in 2026, otherwise, getting the perspective of an expert lender, somebody who specifically knows SBA, financing goodwill, you know, with law firms and professional practices, huge, right? So, Weston, thanks for sharing all your knowledge with us. Look forward to catching up with you soon. And everybody else, we'll see you in the next time on the exchange.

SPEAKER_00 33:33

Thanks, Tom.