Getting the Most Value from a GABB membership
Belonging to the GABB can be worth thousands of dollars if a member takes advantage of all the group’s benefits.
Among the benefits of belonging to GABB:
- A Georgia-based listing service, with hundreds of businesses and franchises for sale in Georgia and the Southeast.
- A portfolio of 30 legal forms drafted by GABB member attorneys that are specifically designed for business brokers, including listing support forms, business buyer forms, deal forms, letters of intent, due diligence checklists, and purchase and sale agreements. Hiring an attorney separately to draft all of these would cost thousands of dollars.
- Access to the online Atlanta Business Chronicle, Atlanta’s award-winning source of business news. The subscription link includes unlimited access to news that grows business, advances careers and simplifies professional lives. Read local market intelligence, stay on-top of emerging business opportunities and connect to a powerful community of local executives.
- GABB forum: Communicate with all GABB business broker and professional affiliate members. Respond to queries from people seeking to hire a business broker, or find out about professional education. Learn how to subscribe to new forum posts.
- Professional Resources: GABB affiliate members include Georgia’s most experienced SBA lenders, business attorneys and financial resources.
To hear a presentation of how GABB members can access these features, please view a recording of our July 7 Zoom meeting.
Or review this PPT presentation.
Getting the Most out of a GABB membership Presentation
For more information about GABB, please email diane.loupe@gabb.org or call or text 404-374-3990, or contact GABB president Dean Burnette at dean@b3brokers.com or (912) 247-3209.
Read MoreBuilding a Strong Brand: What Do Your Customers Say About YOU?
What do your customers/clients say about your or your company when you’re not around?
What do the employees say about you or your company when you’re not around?
Those things represent your external and internal brands, says brand guru Skot Waldron, and they can help or hurt you. Waldron spoke on June 30 to the Georgia Association of Business Brokers about building brand loyalty.
At the end of the day, we all crave loyalty, Waldron says. We want loyalty from our family members, loyalty from our customers, loyalty from employees, and loyalty from the companies we dedicate ourselves to. Your brand is typically associated with how you appear on the outside and how you communicate your value to the world. Skot pushes this idea by saying your brand starts on the inside and drives what’s on the outside.
Things that hurt your internal brand:
- Generic vision/mission/values that inspires no one.
- No self-awareness.
- Fear/manipulation
- Passive aggressiveness
- Misalignment
- You aren’t consistent in your communication.
You damage your external brand by:
- Treating marketing as an expense vs. an investment.
- Staying busy with day-to-day tactics instead of focusing on a strategy.
- Not differentiating your product or service.
- Not knowing how to clearly and confidently talk about your product or service.
- Being inconsistent and lacking a cohesive message
that resonates with people.
Skot recommends that entrepreneurs and small business people should ask trusted colleagues these questions: What five words would you use to
describe me/my business? What are my/our top 3 strengths? What are my/our top 3 weaknesses?
Listen to Skot’s presentation here.
Skot’s PPT Presentation “Why People Aren’t Loyal to Your Brand & What to Do About It,” is linked here:Why People Aren’t Loyal to Your Brand
For the past 18 years, Skot Waldron’s brand work for clients such as J.P. Morgan Chase, CDC, Georgia Tech, Royal Caribbean, Sesame Workshop, Chiquita, and The Coca-Cola Company has included both employee-centric and customer-centric projects.
He helps organizations communicate more effectively with their employees and customers with the goal of creating more alignment, consistency, and loyalty. Skot believes you have to be healthy on the inside (culture) in order to truly be healthy on the outside (brand and marketing). He helps with both.
In addition to running his own coaching and creative agency, Skot has been teaching brand development at the Miami Ad School in Atlanta. He has also traveled to different cities in the U.S. to conduct communication training and speaks about how the value of branding pertains to us as individuals, teams, families, and businesses.
The Georgia Association of Business Brokers, the state’s largest and most prominent association of professionals dedicated to the purchase and sale of businesses and franchises, is holding brief weekly meetings online during the pandemic. Business brokers, bankers, business attorneys and other professionals join the weekly calls to ask and answer questions about buying and selling a business during the pandemic. The GABB also maintains a listing service with hundreds of Georgia businesses for sale.
To join the GABB’s Tuesday meetings, please go to
https://us02web.zoom.us/j/95506520094?pwd=WXdtNjhQVmRSWWdDNk5nV2lHZnNKdz09
Meeting ID: 955 0652 0094
Password: 054703
Documenting Material Adverse Changes: Selling a Business in the Pandemic
The COVID-19 pandemic has had a significant effect on all U.S. businesses, but that doesn’t mean the owners won’t be able to sell.
Thomas Rockwood, Vice President of SBA Lending at Atlantic Capital Bank, outlined for the Georgia Association of Business Brokers what documents business sellers should prepare if they are anticipating selling their business in the near future. Rockwood spoke to a virtual GABB meeting on June 23, 2020.
The pandemic could affect any pending contract because it constitutes a Material Adverse Change (abbreviated MAC), material adverse event (MAE), or material adverse effect (also MAE). In other words, changes triggered by COVID-19 COULD significantly reduce a company’s value because it could impact how the company operates in the future. Many contracts to acquire, invest in, or lend money to a company contain a term that allows the acquirer, investor, or lender to cancel the transaction if a material adverse change occurs and does directly affect SBA Eligibility for a loan.
“A material adverse change can happen to anybody at any time,” Rockwood noted. It’s critical for business owners to document how the event affected their business in order to borrow SBA funds and obtain a favorable purchase price.
When collecting sellers’ financials, SBA lenders will want to see:
- Last 3 years Filed Business Tax Returns
- 2019 FYE Financials to include
- P&L, Balance Sheet, AR & AP Aging Report & Debt Schedule
- 2020 YTD Financials to include
- P&L, Balance Sheet, AR & AP Aging Report & Debt Schedule
“We’re in this place where we have no idea what tomorrow looks like,” Rockwood said. “What are the things we can control?”
A seller can document the impact of the pandemic or other MAE on their business by showing month-by-month P&L comparisons. Did the seller’s business bounce back in June? Another helpful strategy would be identifying sales by customer, showing key customers and how they were affected by the MAE. Sales by product could also be beneficial, Rockwood said.
Preparing a memo of understanding could help a buyer, Rockwood said, because it describes in detail what is going on with a business. For example, if sales go up, but net profits go down, what happened? A memo could explain that labor costs rose and the business had to hire more people to move the product out the door.
If a seller can “bookend the start and end of MAC,” that’s going to help paint a strong picture for a business buyer on what happened to the business, Rockwood said.
Sellers ought to come up with a playbook of operations of how the business has or plans to keep employees safe, so that a potential buyer can walk in and continue running the business smoothly. Although some sellers stay on and advise buyers, sometimes they don’t. That playbook will help a new owner because it “outlines what the seller did, how they handled the situation, and gives some advice to the new buyer.”
“It’s the seller’s company, and they know it better than anybody else could,” Rockwood said. “That will be very beneficial to any buyers who want to buy a business.”
A video recording of the meeting is linked here.
Mr. Rockwood’s presentation is available here.
Preparing to Sell After the Pandemic
Mr. Rockwood has spent more than 16 years working with companies to provide government guaranteed lending solutions. He has a B.S. in Marketing & Business from Central Washington University; and an M.B.A. in Marketing Management, Regis University.In addition to being a GABB member, Mr. Rockwood is an executive board member of the Georgia Lenders Quality Circle (GLQC) and a member of the National Association of Government Guaranteed Lenders (NAGGL).
The Georgia Association of Business Brokers, the state’s largest and most prominent association of professionals dedicated to the purchase and sale of businesses and franchises, is holding brief weekly meetings online during the pandemic. Business brokers, bankers, business attorneys and other professionals join the weekly calls to ask and answer questions about buying and selling a business during the pandemic.
To join the GABB’s Tuesday meetings, please go to
https://us02web.zoom.us/j/95506520094?pwd=WXdtNjhQVmRSWWdDNk5nV2lHZnNKdz09
Meeting ID: 955 0652 0094
Password: 054703
Read More
Pandemic Prompts Closer Scrutiny of SBA Loans
If you’re trying to sell a business, expect bankers to scrutinize the deal more closely in the wake of the COVID-19 pandemic.
Ryan Stoll, an SBA Banker at Cadence Bank, N.A. specializing in Franchise, Business Acquisition and Real Estate Lending, spoke to the GABB’s guest on Tuesday, June 16, about SBA lending and the Paycheck Protection Program (PPP) program.
Cadence Bank, along with many others, is asking clients to get help from their CPA’s to gather the information they will need to apply for forgiveness through the PPP program.
The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. New SBA guidelines have loosened forgiveness restrictions, according to Forbes, to make it easier for businesses to receive partial loan forgiveness.
Borrowers can qualify for partial loan forgiveness if less than 60% of the PPP loan is used for payroll, according to The Journal of Accountancy. The journal reported that a law signed June 5 lowered to 60% from 75% the minimum percentage of PPP funds borrowers have to spend on payroll costs to have the loans forgiven. But while the original PPP rules allowed for partial loan forgiveness under the 75% basement, the new bill passed by Congress had language that could be interpreted as saying that if the borrower did not spend at least 60% of the PPP funds on payroll costs, none of the loan would be forgiven.
“We fully anticipate the forgiveness process to take us into the first quarter of next year with many of our clients,” Stoll said. “We have 60 days to review the forgiveness application, and the SBA has 150 days to make a ruling on the forgiveness application. We’re going to be working on PPP deals into 2021.”
Cadence Bank funded just under 4,000 PPP loans worth about $1.2 billion to clients and non-clients.
In response to a question from GABB President Dean Burnette about how the PPP program will affect acquisition loans, Stoll said banks are going to be doing enhanced underwriting, more due to COVID-19 than the PPP. Loan officers are going to want to be assured that any business up for sale is able to open and do business.
Banks will want to know what precautions businesses have taken and “if there are projections provided on a deal, we need to know how COVID-19 was taken into account for the projections,” Stoll said.
“We need to have from our borrowers contingency plans for how they would operate if the economy is partially or fully shut down again,” Stoll suggested. Brokers representing sellers should have year over year statements to show the impact of the downtown. “We do expect that businesses were substantially impacted in the downturn.” But if a business can demonstrate a return to normal, “that has appeased my credit officers.
In larger transactions, credit officers will want more equity from the borrower and want the seller to hold more paper, Stoll said. Some in the industry think some service companies are over-leveraged at this time. “So we’re looking for more equity and a larger seller contribution on those types of transactions,” Stoll said. “I wouldn’t be surprised if you’re seeing banks coming back with a portion of the seller note or all of the seller note being on a payment standby for some period of time.”
But Cadence and other banks are still lending, although many bankers are warmer to essential services businesses than non-essential services businesses, he said.
“Expect us to be coming back with very firm, very final offers when it comes to the structure of the equity,” Stoll said. “There may be some negotiation with rates, but as far as equity goes, the credit officer will be very firm.”
The Georgia Association of Business Brokers, the state’s largest and most prominent association of professionals dedicated to the purchase and sale of businesses and franchises, is holding brief weekly meetings online during the pandemic. Business brokers, bankers, business attorneys and other professionals join the weekly calls to ask and answer questions about buying and selling a business during the pandemic.
To join the GABB’s Tuesday meetings, please go to
https://us02web.zoom.us/j/95506520094?pwd=WXdtNjhQVmRSWWdDNk5nV2lHZnNKdz09
Meeting ID: 955 0652 0094
Password: 054703
SBA’s Newest Guidelines for the Paycheck Protection Program
WASHINGTON—The U.S. Small Business Administration, in consultation with the U.S. Department of the Treasury, has issued new and revised guidance for the Paycheck Protection Program (PPP). This guidance implements the Paycheck Protection Program Flexibility Act (PPPFA), signed into law by President Trump on June 5, 2020, and expands eligibility for businesses with owners who have past felony convictions.
To implement the PPPFA, SBA revised its first PPP interim final rule, which was posted on April 2, 2020. The new rule updates provisions relating to loan maturity, deferral of loan payments, and forgiveness provisions.
These modifications implement the following important changes under the PPPFA:
- Extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
- Lower the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs and that 75 percent of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
- Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID–19.
- Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
- Increase to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
- Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
- In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.
In addition, the eligibility threshold for those with felony criminal histories has been changed. The look-back period has been reduced from 5 years to one year to determine eligibility for applicants, or owners of applicants, who, for non-financial felonies, have (1) been convicted, (2) pleaded guilty, (3) pleaded nolo contendere, or (4) been placed on any form of parole or probation (including probation before judgment). The period remains 5 years for felonies involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance. The application also eliminates pretrial diversion status as a criterion affecting eligibility.
SBA issued revised PPP application forms to conform to these changes. The guidance and revised application forms are available on SBA’s and Treasury’s websites. SBA will issue additional guidance regarding loan forgiveness and a revised forgiveness application to implement the PPPFA in the near future.
New SBA PPP Borrower Application, revised June 12, 2020
SBA Administrator Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin praised the Paycheck Protection Program (PPP) Flexibility Act, signed into law by President Trump on June 5. They issued this statement:
“We want to thank President Trump for his leadership and commend Leader McConnell, Leader Schumer, Speaker Pelosi, and Leader McCarthy for working on a bipartisan basis to pass this legislation for small businesses participating in the Paycheck Protection Program.
“We also want to express our gratitude to Chairman Rubio, Ranking Member Cardin, Senator Collins, Congressman Roy, Congressman Phillips, and other members of Congress who have helped to create and guide our implementation of this critical program that has provided over 4.5 million small business loans totaling more than $500 billion to ensure that approximately 50 million hardworking Americans stay connected to their jobs.
“This bill will provide businesses with more time and flexibility to keep their employees on the payroll and ensure their continued operations as we safely reopen our country.
“We look forward to getting the American people back to work as quickly as possible.”
Read More