Let's face it, times are touch financially in America right now. Unemployment is nearing 8%, there are banking default issues, the housing epidemic...the list goes on. It seems to me that when it comes to financing, banks are doing the exact opposite of what the Federal Government is asking them to do. They are hoarding all the money and not lending out credit to consumers and small businesses. This in turn is causing a hault in productivity, jobs, and business in general.
We have always had financing available to buyers looking to financing an accounting practice or CPA practice. We still do have lenders for both conventional and SBA loans. We also still have money available for not only the practice acquisition but also additional funds for working capital. The rates have also been very reasonable, typically around prime + 2-3 points, 10 year terms with no prepayment penalty. Financing is what helps run our business and helps allow not only sellers to sell their practice but also buyer's without loads of cash on hand to purchase.
2009 may be a bit different in the past...rates might go up, I believe banks will also be very cautious in lending and will perform proper due diligence on every buyer. They may be looking for a reason to say no instead of looking for a way to say yes? It is still very early and like I said before, we still do have financing options available to buyers. If you would like to discuss your situation in further detail, please contact us. Again, we can help you financing a practice even if we do not represent the owner.
Blog By:
Business Development Officer
Comments
| Brian Naab |
March 02nd, 2009 8:59am
Bank financing also gives the seller confidence that the buyer will take care of the client base because of the outstanding financial commitment they have entered. A buyer putting down 10% at closing has no real ties or commitments to maintaining the client base and in essence could cherry pick the client list over time?
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| Brian Naab |
March 02nd, 2009 8:55am
There are going to be tighter restrictions on lending, that is for sure, but bank financing is not gone. We still have conventional financing available and with prime hovering around 3.25%, rates are very reasonable. Also SBA is still a player however still in the process of changing their guidelines.
With Seller financing, sometimes the owners do not want to be involved the day to day operation in order to receive their money. Bank financing allows them to receive their cash up front. Bank f
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| bob |
March 01st, 2009 11:16am
Financing a practice at 3% over prime is an undue constraint on cash flow. Seller financing is a better way to go with upside for the seller and the buyer. Bank financing is gone.
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| Brian Naab |
February 17th, 2009 3:11pm
It is still early and banks will have to eventually start lending again. It is usually pretty quite during tax season anyway. We should know a lot more with respect to financing of accounting practices after tax season.
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| Jim |
February 17th, 2009 3:09pm
Looks like things may be tight in 2009? Is this an understatement.
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