How To Successfully Finance Your CPA Practice Acquisition with an SBA 7a Loan

How To Successfully Finance Your CPA Practice Acquisition with an SBA 7a Loan

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This episode provides guidance on financing a CPA practice acquisition using an SBA 7a loan. Beau emphasizes the critical nature of addressing financing when considering buying a CPA firm. Many CPAs have faced difficulties selling their accounting firms due to buyers' inability to qualify for financing.

An SBA 7A loan is a government-backed loan program to assist small businesses, including CPA firms, obtain financing. It can provide up to $5 million, and sometimes more, to finance the acquisition. Unlike conventional financing, which can be challenging for CPA practices due to lacking tangible collateral, SBA financing approval is primarily based on historical cash flow, the buyer's experience and qualifications, and credit history.

SBA loans have a lower down payment requirement, with a minimum equity injection of 10%, significantly lower than what traditional lenders require. The interest rates on SBA loans are typically variable and adjusted quarterly based on the Wall Street Journal prime rate plus a margin. The margin varies depending on the strength of the deal and the sponsor.

Choosing the right SBA lender is crucial in the financing process. Some lenders participate in the SBA's Preferred Lender Program (PLP), enabling them to make their own credit decisions and provide a faster approval process. Sellers or buyers of CPA firms should work with professionals who have extensive experience in obtaining this type of financing. Beau highlights their close collaboration with preferred SBA lenders, including banks, non-bank institutions, and credit unions specializing in CPA practices, and their ability to help buyers and sellers navigate the financing process smoothly.

Interested individuals can contact the speaker to learn more about financing their CPA practice acquisition with an SBA 7A loan and book a call for further assistance.

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Timestamps:
[00:01] Introduction to financing your CPA practice acquisition with an SBA 7A loan
[00:32] Challenges faced by CPAs trying to sell their accounting firms due to buyer's financing difficulties
[01:13] Factors considered for SBA 7A loan approval: historical cash flow, buyer's experience and qualification, and credit history
[01:42] Advantages of SBA 7A loans: lower down payment requirement, competitive interest rates
[02:04] Importance of choosing the right SBA lender, preferred lender program for faster approval process
[02:34] Working with professional SBA lenders specializing in CPA practices, contact for more information

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#CPA #CPAPracticeAcquisition #SBA7aLoan #SBA #SBA7a

About Beau: Beau Eckstein is a real estate entrepreneur, TV personality, and commercial mortgage advisor, specializing in construction financing and multi-family lending.

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