Kendall Ross, Executive Director of the Fort Smith Center for Economic Development invited John Green, CBI Northwest Arkansas Executive Business Broker, to attend the UAFS Economic Development Session on December 12th.
In a post to Facebook, the UAFS Center for Economic Development commented on the event, “Full house this morning at the Jim Walcott Family Enterprise Center. Thank you, Art Richey, JD and the Regions Bank team for the important presentation on Exit Planning for the Family Business, and its tie-in with SBA lending. Another UAFS Center for Economic Development event at the beautiful Bakery District in downtown Fort Smith!”
Art Richey of Regions SBA Loan Division shared key insights about the impact of recent SBA lending rules on business owners planning their exit. Following Art Richey’s presentation, he recognized John Green as a representative for CBI Team and shared how CBI Team helps business owners plan their exit.
According to John Green, “Regions has seen a significant uptick in Partner Buyouts with this summer’s modification of rules to the SBA lending program.” John Green highlighted the 7 take-aways from the presentation below:
- With Standby rules being loosened, it has allowed the departing owner to receive funds immediately.
- Even in the case of a delay in standby, the seller may receive interest payments immediately.
- The fee structure for loans under $1,750,000 are significantly reduced.
- Regions suggest they can complete these transactions within 60 days of receipt of the package.
- Loans are based on Prime and currently they are seeing 8% to 9.2% rates.
- Regions is open to using “projections”, if the transfer of ownership looks to expand capacity and understandable business plan.
- Ther is no cap on 504 (Rela Estate) loans, while standard SBA loan caps at $5,000,000.
According to John Green, “Generally speaking, Art seemed to be speaking about the buyout of the business by an existing partner but did indicate that many of these new flexibilities in the SBA loan process can be attractive to outside buyers as well.”