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Preparing Before Presenting
By Peter C. King VR Business Brokers/Mergers & Acquisitions, CEO
Follow the Necessary Steps to a Successful Business Sale
Most business owners, who are looking to sell, make the mistake of not preparing early enough. This can result in not receiving the maximum dollar amount for your business.
The selling process should start when you buy your business. You should know the return that you are receiving on your investment so when the time comes to sell you will not leave any money on the table. In order to consummate a successful sale with a qualified buyer, each VR business intermediary has been trained to help you take the necessary steps. Most business owners should be preparing to sell long before they make the decision to move forward. The following are some helpful ways that will keep your business in good shape, and prepare you for when the time’s right to have your VR business intermediary search for a qualified buyer. 
Evaluate Your Business Before the Buyer Does  
If you want the buyer to avoid finding anything that could jeopardize your chances of successfully selling your business, you should perform due diligence before they do. A qualified buyer will perform a comprehensive evaluation that goes beyond financial records; therefore, it’s a smart decision to make sure everything is accounted for before presenting the business to them. Make sure that the due diligence covers a variety of different areas such as:  
Grab the Opportunity to Buy a Business
By JoAnn Lombardi, VR Business Brokers/Mergers & Acquisitions, President
More and more people have decided to become a small-business owner. Many have determined that to do so gives them greater control over their future, and have gone down the road of acquiring an existing business. A large percentage of these prospective buyers are mulling over the decision to change their career path and join the entrepreneur ranks.
Although it’s understandable that many aspiring entrepreneurs are holding off until the "perfect business" comes along; the time to buy a business is now. 
There are four reasons why you need to jump on the business opportunities available at VR Business Sales instead of sitting on the sidelines.
A Rise In Subscription Credit Facilities
Subscription credit facilities or bridge loans are not new to the private equity market, but have certainly grown in popularity over the past decade. As defined by Preqin, subscription credit facilities are short-term loans provided to private equity firms to cover transnational costs—giving buyers more flexibility as to when they have to make capital calls and how they fund their portfolio companies. 
“There are two distinct segments of the market. The traditional short-term subscription facility is truly bridging the capital calls for 30, 60, or 90 days. These are bridge facilities,” says Mark Kromkowski, a partner with McGuire Woods LLP and head of its investment fund group. Kromkowski represents both funds and lenders in connection with subscription credit facilities throughout the United States. “On the other side of the spectrum, some private investment firms are using them for two or three years or even longer. They are pushing the upper limits of semi-permanent leverage.”
It’s important to note that there are no requirements for GPs to submit information on subscription credit facility usage. However, anecdotal evidence demonstrates that there has been an increase in usage. According to Preqin, the number of private equity funds using subscription credit facilities has almost tripled since 2010. In the past decade, the proportion of funds using credit lines peaked at 53% for vintage 2016 funds. 
Overcoming the Bankers Dreaded Dozen Objections in Business Acquisitions
By: Tom Zernick, President of SBA Lending at First Home Bank
1. No Creative Addbacks
  • Must be documented through IRS tax returns and/or interim financials
  • Allowable: nonworking friends & family on payroll if reported on W-2
  • Unusually high fees, legal or bad debt
  • Excessive owners compensation
  • Non-recurring expenses
  • Moving costs
  • Product development expenses
2. Seller Tax Return Verification
  • Get a signed 4506T, from seller, on day 1
3. Comprehensive Business List of Insurance Requirements to Close
  • Obtain list from seller
  • Provide contact information for the agent
  • Bank can work directly with buyer’s insurance provider to obtain required insurance certificates with the appropriate SBA language
4. Collateral Shortfall Require Life Insurance
  • Work with “quick close” insurance provider as soon as approved
  • Collect copies of existing life policies if assignable
  • Provide the Bank with contact information of the insurance provider so the Bank can obtain the policy with the appropriate assignment  
5. Needing More Equity in The Deal
  • If $500,000 or greater in Goodwill, will need to come up with 25% equity
  • Minimum 10% Buyer equity and remainder can come from seller note if on full standby for 2 years (no principal or interest payments allowed)
  • Gift Letter with 2 months bank statements showing source of this gift equity
  • Minority investor <15% ownership
Pit Stop Burger | $369,000 | Los Angeles, CA
Fine Aesthetics and Laser Center|$499,000 | Palm Beach, FL
Pesco Pumps | $449,000 | Dallas, TX
La Criolla Market & Check Cashing | $50,000 | Gardena, LA
Home-Based CBD Oil Company | $90,000 | Naples, FL
Profitable Mental Health Clinic|$750,000 | Colorado Area
Head Shop | $250,000 | Raleigh, NC  
Own One Of The Largest Dry Cleaning Operations In The Triangle! This established, non-franchise dry cleaner opened more nearly four decades ago to service the Triangle community and have grown it into the multi-location center that it is today. 
By owning the dry cleaning plant, the business is able to control costs through in-sourcing the cleaning services. The business takes in garments at the plant as well as six other drop centers across Raleigh, Chapel Hill, Cary, and Durham, transports them via a company owned & lettered vehicle. The company also offers a variety of garment services including dry cleaning, spot removal, alterations, and leather/suede repair.
For more information:
Neil Isaacs,
Owner, VR Business Brokers Raleigh, NC
Successfully closed a Family-based Behavioral Counseling Center. This business provides intense counseling to clients in their home involving the entire family and addressing serious behavioral issues. Referrals come primarily from hospitals, outpatient services, behavioral health rehab services and school systems. Books and records are reviewed by the state and by the health insurance company under contract to the state. Its pristine reputation for the services provided clients, and for the clarity of its records, has been carefully built over the last 18 years. The skilled staff combines their bilingual capabilities and experience in counseling to take clients and their families through an initial period of intense therapy to then move to a longer-term program to sustain the improvements. The new ownership looks to expand its reach with additional acquisitions. 
Congratulations to Raymond H. Melcher.on this successful transaction!  
?For more information contact rmelcher@vrmarathon.com.
Z Pizza Class A Franchise Pizzeria| $43,000 | Brea, CA 
Jimmy John's| $120,000 | Fort Worth, TX
Anthony's Flowers | $500,000 |  Los Angeles, CA 
GNC Franchise | $90,000 | Irvine, CA
Italian Restaurant | $215,000 | Arapahoe County, CO
Travel Agency|$182,000 | Las Vegas, NV
Thinking of selling your business or looking for an established 
business to purchase?Contact a VR Office Near You!
Have You Ever Considered Selling Businesses?
Small businesses make up over 56% of the annual U.S. GDP and every year a large amount of them change hands. VR is the industry leader in facilitating such transactions. Click here for more information on how to join VR.
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