It took over a year, but we sold the contracting business in Phoenix. Every seven-figure transaction is going to have some hiccups, and this was no exception. One of my frustrations is the lack of assistance available from banks and the SBA.
A traditional bank loan involved an acquisition portion (longer term, amortized) and a working capital portion (a revolving credit that would go up and down, interest only, based on the value of inventory and accounts receivable). Those are just not available anymore.
There is a terrific opportunity for people in the lending business to take over that role, by the way.
Back to the transaction. My role is to clearly and accurately describe the financial results and the way the business operates to prospective buyers. I need to also describe the financial and other requirements of any buyer which, in the real world, means discouraging a lot of people.
Financial institutions and a lot of brokers do not fully understand the contracting business, and it is essential to have a working knowledge of the lingo and the details. Items like retention, bonding, pay-when-paid, AIA billing and so on. All are terrifically significant.
When the drive to the finish line starts, it is my responsibility to keep all the parts in motion, and particularly to get the financing locked in place.
Thankfully, the buyer and the seller in this instance were reasonable people and we got the deal done with a minimum of fuss.
Thanks to all involved.
