Learn About the Board-Certified Broker Program: Aug. 4
Clients who want to buy or sell a business want to know they are working with a business broker who knows what they’re doing. That’s why the Georgia Association of Business Brokers is preparing a certification program to help train business brokers to better represent their clients.
Business brokers and those who aspire to become brokers are invited to the GABBs’ virtual meeting on Aug. 4, 2020, at 10 a.m. to hear about the Board-Certified Broker or BCB proposal.
The GABB believes that to be a successful business broker, a person must understand issues beyond those typically covered by real estate schools. That’s why the GABB has acquired a license from the Georgia Real Estate Commission (GREC) to operate a real estate school, the only such school in Georgia dedicated to business brokering. The proposed BCB program will teach business brokers what they need to know about accounting terms, federal tax returns, understanding financial statements, recasting financial statements, business and inventory valuation, financing a business sale, understanding legal issues, understanding business structures, confidentiality, marketing, ethics, due diligence, securing business-for-sale listings, and setting up a business broker practice.
The GABB has posted details about the curriculum online at the GABB blog.
At the Aug. 4 meeting, members and others will be able to offer feedback on our proposal.
Under Georgia law, there is no specific licensing requirement to be a business broker. However, anyone selling or buying, offering to buy or sell, acquiring prospects to buy or sell or negotiating for the buying or selling of real estate for compensation must be licensed by the GREC. According to section 520.1-.19 of Georgia law, Business Brokers are covered by the same legal requirements as any Real Estate licensee if the sale includes the transfer of any interest in real estate, including leases.
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.
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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.
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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
Reopening your Business amidst COVID-19: GABB June 9
Russ Hall, Action Coach.
Reopening a business after a shutdown will be a spring, and could take more effort and preparation than shutting it down.
That’s what business coach Russ Hall said to the Georgia Association of Business Brokers during the group’s weekly videoconference on June 9.
Watch a video of his presentation at this link.
View Russ’s PPT presentation here. Rethink Reinvent Reopen PPT
Hall is a GABB affiliate and an Action Coach with an organization focused on helping the owners and teams of small businesses improve performance so that they can improve their lives. Business brokers and others who may be solopreneurs can use these suggestions to garner positive PR and visibility in the community, Hall said.
Hall’s presentation gave business professionals something they can use to stay engaged with people that’s positive and forward-thinking as opposed to negative and a downer.
A former US Naval Aviator, Hall spent 21 years with a Fortune 100 company in the Healthcare Technology sector, leading and managing teams in Sales and Customer Service. He earned a Master’s in Industrial-Organizational Psychology at the University of Georgia, studying the application of evidence-based methods to the improvement of individuals and teams in business and other organizations.
The GABB is the state’s largest and most prominent association of professionals dedicated to the purchase and sale of businesses and franchises, and operates the state’s only professional real estate school dedicated to business brokering.
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
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GABB Covid-19 Update: Loans, Lending and Liability
The second round of the SBA’s Paycheck Protection Program funding, released Monday April 27, is being distributed by SBA lenders, and is expected to be depleted within just a few days, David Brindley, VP of Small Business Lending at Live Oak Bank, told the GABB in a Zoom meeting on April 28.
David Brindley
Brindley also said the new round of PPP funding is tied to the SBA’s 7(a) loan program, the SBA’s primary program for providing financial assistance to small businesses. The 7(a) program will also be depleted when the PPP runs out of funds, although he anticipated that Congress would approve additional funding in the near future, although “we don’t know when for sure.”
Hear what Brindley had to say at the meeting at this link.
Many other SBA lenders in the GABB told us that they were extremely busy working on PPP loan applications that had been submitted earlier. “For the last month, it has been all hands on deck as everyone in the bank jumped in to help process PPP loans,” Brindley said. Like many other banks, Brindley’s bank “took the approach that we would take care of existing customers first and then open up for new customers.”
His bank temporarily paused most other lending in March to focus on the relief lending through the CARES Act. When the 7A program resumes, Brindley says he expects the SBA to guarantee 90 percent of the loan, as opposed to the 75 percent they have covered in the past. Lenders are going to take a new approach to due diligence, he said. Live Oak looks favorably upon businesses with a strong cash flow and good management.
“We will also require projections from buyers,” Brindley said, to make sure they really understand the cash flow and working capital needs of the business. Also, as part of the CARES Act, the government will make the first 6 months of payments for new SBA loans that close before September 2th.
He ran down a list of potential questions for future SBA loan applicants, including whether the business closed during the quarantine, were customers and suppliers significantly impacted by the shutdown, what disaster funding did the business receive, and why does the buyer think it’s prudent to go forward with a business purchase in the midst of uncertainty.
“We’re going to do even more due diligence than we did before,” Brindley said. “We want to make sure there’s more working capital built into our projects.” Toward that end, his bank — the largest SBA lender in the country — will add additional working capital into loans so that businesses have adequate operating capital in reserve.
“We are open for business right now,” Brindley said. “for historically strong transactions and we are willing to use a common-sense approach to mitigate a Q2 Covid 19-related impact to the business. If we can see that a seller’s revenues are trending back to historic levels and there is sufficient working capital built into the deal structure, we will look at transactions today.”
Larry Domenico
Attorney and GABB Affiliate Lawrence Domenico, a partner in the law firm of Mozley, Finlayson & Loggins LLP, discussed potential liability as businesses prepare to reopen fully or partially. The Georgia Governor has issued specific guidelines for businesses to safely open, as has the CDC.
“I’ve never said ‘it’s not clear, or I don’t know” so many times in my practice of law as in the last couple of weeks.” Language within the gubernatorial order appears to exempt reopened businesses from liability, but it isn’t clear that will give businesses blanket immunity. If a business misses covering one of the safety items listed in the order, maybe you don’t get protection from liability. Traditional body of common law considers whether an entity acted reasonably, and there is varying advice on that front.
“Every business owner is going to have to decide for themselves what is reasonable,” said Domenico. “I think if you try to follow the CDC guidelines, try to follow the governor’s orders, you will have a pretty good defense, but I’m not going to be able to tell you you’re in the clear no matter what.”
The GABB plans to have weekly Zoom meetings on Tuesdays for updates on aid available during the COVID-19 crisis. Check our blog for information on joining future calls.
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