The Situation: Horticulture Expert Buys Plant Nursery From Retiring Owner

Our client was a young man, originally located in Oregon, who wanted to move to California and buy a plant nursery business from the owner who was retiring. Through his service in the military, he was experienced in horticulture, though he had never owned or operated a business. The plant nursery business thrived throughout the COVID-19 pandemic and had a record of good cash flow. The retiring owner and buyer wanted to move quickly to get the sale completed before the busy plant-selling season got into full swing.

  • Limited Personal Resources – Through savings and gifts from family, our client put 10% down on the business acquisition, far less than what standard business loans require.
  • Lack of Backup Collateral – Many lenders refuse to fund home improvement and plant nursery businesses because of the complexity surrounding valuing the inventory and the lack of hard collateral, like real estate.
  • Short Close – Both parties requested quick turnaround so the acquisition would be complete with plenty of months left in the busy plant season.
  • Lack of Prior Business Ownership - While our client was very experienced in horticulture through military service, he had never owned or operated a business.

The Solution: SBA 7(a) Loan Funded in 30 Days

First Business Bank, an SBA Preferred Lending Partner, provided a structured $900K SBA 7(a) loan package for the business acquisition and working capital. Benefits of working with First Business Bank to fund this acquisition included:

  • Speed & Precision – Although our experienced SBA team hadn’t completed a complex plant nursery acquisition and this one was time-sensitive, as an SBA Preferred Lender, our SBA team had confidence we could successfully close in 30 days. 
  • Flexible Underwriting – With the SBA 7(a) loan program, First Business Bank arranged a lower down payment that what’s typically available with conventional financing. SBA 7(a) loans also allow buyers longer payback terms.
  • Launching Pad – With new energy in the business, this purchase is just the start for this young business owner, who is now poised to acquire other nurseries in area in the future, create jobs, and grow the business.