370 - Has The Government Shutdown Killed Business Acquisition?! Part Two

0:00Hi, I'm Bruce Whipple, and welcome to Part 2 of Has the Government Shutdown Kill Business Acquisition? In part one, which was a video I did yesterday, I explained what's happening with the SBA and how furloughed employees and frozen systems have put loan approvals on hold and created a growing backlog. The SBA itself has said that each business day of the shutdown, approximately 320 small businesses can't access about$170 million in SBA-backed loans. That's each day. So as of October 21st, that's roughly$2.5 billion in capital delayed for about 4 ,800 businesses. And since as I record this, we're at October 31st, you can put 10 times another$170 million on top of that.

0:54Today I want to go a little deeper because while a lot of people see this as a roadblock, I see it as an opportunity. If you understand seller financing, and I hope you do, and know how to position it, you can actually use this slowdown to your advantage. So let's start with the facts. Right now, SBA lenders can't get new loans approved. We know that. Even those already in the pipeline are stalled until the SBA reopens. That means thousands of buyers are sitting still, unable to close, and unable to move forward. And if you're one of the people counting on SBA financing to fund your deal, you've got to recognize that that timeline just got a lot longer.

1:35An LOI with 30, 60, or even 90 days of exclusivity probably won't be enough. By the time the SBA clears its backlog, you could lose your deal simply because your exclusivity period expired. That's why I recommend, at a minimum, 180 days of exclusivity right now. It sounds long, and it is, but it's realistic given the shutdown. And more importantly, it gives you room to pivot. So what does that mean? So here's where the opportunity lies. While everyone else is waiting on banks, you can approach the seller and say, look, with the SBA shutdown, approvals are taking months. You don't want to wait that long, and neither do I.

2:18Let's structure this deal as seller financing instead. That single conversation changes the entire game. You're offering a faster close. You're solving the seller's problem, uncertainty. You're creating a win-win. The seller usually gets a higher price and steady income as well, since they are the bank in that transaction. And you get the deal done while the competitors are stuck in limbo. Now, seller financing isn't right for every situation. If the seller has heavy debt, as I've said before, it's harder to make it work, if it can work at all. But for older owners who've paid off their businesses and value steady retirement income, it's really ideal.

3:03You have to believe that to be able to help sell it, however. It gives them security, income, and in many cases, better tax treatment than an all-cash sale. But that is a question their accountant should answer for them. Think about it this way. Most of the acquisition market, individuals, searchers, small buyers are on hold right now because their lenders can't move. If you can structure a deal creatively through seller financing, you're one of those few buyers who can still close. That makes you more credible, it makes you more attractive to sellers, and it gives you leverage to negotiate better terms.

3:45This is the moment where professionals separate themselves from the pack, or the bots, as I say. Amateurs will wait for Washington to reopen. Professionals will adapt and close anyway. So here's what I tell every mentee right now that's listening. Number one, keep sourcing deals. The good ones don't stop appearing because the government shut down. Number two, extend your exclusivity timelines. 180 days is smart. Number three, pitch seller financing. Use it as your edge, but remember to know what the goals are of the seller and then match that up with how seller finance can support those goals.

4:28And then number four, educate yourself. Know how to structure it, how to sell it, and how to protect yourself. If you don't already know how to do that, guess what? I created a complete course that walks through it step by step. You can find it on briswhipple.com and just look for the courses and the seller finance mastery program. Remember, the shutdown didn't kill business acquisition. It just exposed who's serious. The ones who adapt will win and the ones who wait don't. Use it wisely. And as I've said for decades, never ask, never get.