Financing

Whether you are buying a practice through us, one of our competitors or working directly with a Seller, we can help secure a loan for you. ABA Advisors has relationships with lenders that provide both conventional and SBA guaranteed loans. We do more than just give you a list of lenders to call and hope it all works out. We guide you through the entire process from start to finish. This can even include approaching and working with more than one lender when necessary.

3 Things Buyers and Sellers Need to Know about Financing

1. Not All Banks Are The Same– Most banks do not place much value in an accounting firm. There are very few assets to sell and most banks are Asset-Based Lenders. I have watched CPA’s and EA’s with great practices, excellent personal credit and many years of experience consistently get turned down by their own bank when seeking acquisition funding to buy a practice. This is the bad news. The good news is that we have the experience and the lenders to get these types of loans done.

2. You Must Pick The Right Lender – My father used to tell me that when you go to a Steak House, order Steak! This holds true for picking a lender to provide acquisition financing for the purchase of an accounting firm. Pick a lender, and a loan officer, that has experience lending to accountants. Do not attempt to teach a banker the true value of an accounting firm. Unless you have assets to back up your loan request you will typically not be successful. Do not let a banker make your loan his first SBA loan. This is another mistake.

3. Have Someone With Experience Help – The ABA Advisors’ Team has successfully put together hundreds of these types of loans. We can take the guesswork out of which bank to work with and help guide you through the entire process. Don’t let the financing piece of the transaction ruin a great acquisition opportunity or the sale of your accounting firm to a great buyer.

Register below and request the article “Financing the Acquisition of an Accounting Firm with a Bank Loan”

Types of Loans Available:

  • Borrow up to 80% of the REVENUE of your accounting firm. EX. A firm that has 500k in revenue can borrow $300-$400k using only their firm as collateral.
  • Purchase or refinance owner-occupied real estate. Up to 85% LTV.
  • Finance or re-finance an acquisition loan for the purchase of a CPA firm.
  • Borrow money for a partner buy-in or provide capital for a partner buy-out.
  • Lines of Credit or Working Capital.
  • Terms available from 10-25 years with fixed and variable interest rates.

Borrowers must have good to excellent personal credit and there must be cash flow in the business to support the new debt service.

EXAMPLES OF RECENTLY CLOSED LOANS:

ISSUE 1:  A 350K CPA firm had roughly 150K of business debt, including a bank loan, line of credit and credit cards used in the business. In addition, the owner wanted to acquire the building he was currently renting and had about 15K in new equipment purchases he wished to make.

SOLUTION:  We put together a 260K loan that allowed the owner to re-finance all business debts, borrow 15k for new equipment purchases, borrow the money to make a 20% down payment to purchase the building and provided some additional working capital. The owner was able to purchase the building he operates his practice from and cash flow was also improved on the re-financing of the business debt.

ISSUE 2:  A 1M CPA firm had roughly 600K of business debt on the business. In addition, the owner needed 140K cash.

SOLUTION:  We put together a 740K loan with a 15-year term that improved the cash flow of the practice and got the owner the 140K cash he needed.

ISSUE 3:  A large multi-partner firm had made several acquisitions over the past 7-8 years and had about 700k in total business debt. In addition, the partners had injected about 300K of their own money into the firm. The monthly debt service on the 700K of debt was almost 30K per month!

SOLUTION:  We put together a loan for $1,000,000 to refinance all business debt including 300K of cash back to the partners!Here’s the best part….the 1 million dollar loan improved their monthly debt service by $20,000 per month. Their old monthly debt service was 30K/month — New monthly loan payment – 10K/month!

Whether you are buying a practice through us, one of our competitors or working directly with a Seller, we can help secure a loan for you.

Request a Free Valuation

Contact ABA Advisors, LLC

5829 N. Post Road
Indianapolis, IN 46216

Direct: (317) 546-7720
Toll Free: (866) 950-4522
Fax: (317) 522-1551
Email: info@acctsales.com

Be Sociable, Share!
Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Print this pageEmail this to someone