The Situation: Manufacturing Company President Purchases The Business
Recently a Wisconsin manufacturing company hired a President to secede the owner. A year later, the owner unexpectedly passed away and, after the estate settlement, the President sought to buy the company. However, loan eligibility difficulties caused First Business Bank’s SBA team to re-structure the loan multiple times while the client persevered and adjusted to get loan approval from the SBA.
- Deal Complications
Amid the flood of Paycheck Protection Program requests and interpretations of SBA eligibility, First Business Bank’s SBA team kept encountering roadblocks and delays but kept working to problem-solve and get a deal structured appropriately for our client.
- Inconsistent Historical Financial Performance
The previous owner’s death caused some historical performance issues, however, the business was trending upward under the current President. His vision and operation plan was clearly articulated and the positive financial performance demonstrated the strength of his management ability.
The Solution: 7(a) SBA Loan From First Business Bank
First Business Bank, an SBA-designated Preferred Lending Partner, provided a 7(a) loan totaling $1.2 million, which included purchasing the business and real estate. The Rollover for Business Startup (ROBS) allowed our borrower to access his retirement accounts penalty-free, which was used for the down payment on the transaction.
First Business Bank’s closing team worked closely with the client and SBA to achieve a rewarding end result and avoided a financing fall-through.
First Business Bank’s expertise in SBA lending allowed us to communicate effectively with the SBA and establish an eligible loan structure that all parties could agree to.
Together, the SBA 7(a) program and the ROBS program were the right choice for our client to buy the business and real estate. Accessing his retirement accounts penalty-free preserved his post-closing liquidity.