Small Business Aid Package: Buyers’ Bill, Sellers’ Bill or Both?
When the small business aid package passed in September, creating a $30 billion small business lending fund and providing $12 billion in tax breaks to help companies invest and hire, business owners in every industry began to ask the question: How will this affect my company?
There is no doubt that the legislation should impact the printing industry—both buyers and sellers. The question is, Will it? When? And, how?
Here are some pressing questions many of us are asking:
Will sellers have it easier, since buyers should have better access to capital?
In theory, yes! In actuality, we simply don’t know. Too often when such government programs are announced, we do not see any real impact on “small business” and/or lenders at the local level. Buyers should check out their lending sources and see if their potential lenders are really serious about lending to them. This means going through the process of doing a thorough review of one’s financial profile and getting a firm commitment from the lender.
It is one thing to have a loan officer (salesperson) give you a verbal “You qualify.” and quite another to get the loan committee’s actual approval. Franchise organizations, and in some cases business brokers, have lending sources they work with that can help with this process.
A better answer to this question might be that if a buyer or seller has to rely on government stimulus to make a deal happen, they may not be thinking right. If a fair sale price is established and a buyer is financially qualified for the size of the purchase, the deal should get financed with or without any special incentives. That said, the aid package should help and certainly should not hurt.
The recession has produced a large number of qualified buyers that have been downsized by corporate America. This should make it easier for sellers to find a buyer. Moreover, with government incentives, it should be easier to get financing.