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What Business Owners Should Know about the Events that may Change their Exit Strategy

Joe Braier, President of Lake Country Advisors,  was one of the experts in a M&A Round-table discussion in February 2021.  Other experts included Kelly Renz and Kristina Ebner with Timothy Reardon asking the questions.

Selling a business is always an uncertain journey, but it is even more precarious in the middle of a pandemic and during dramatic changes in the political landscape. Both have had a disruptive effect on the merger and acquisition market. The Milwaukee Business Journal recently sat down with a panel of experts to talk about the potential ramifications on owners who are looking to sell their businesses.

Going into 2021, all agreed that has we get into the new year, this should be a banner year for M&A activity because of the backup due to Covid.  The SBA (Small Business Administration) has temporarily revised their underwriting guidelines where principal and interest payments are deferred for a borrower for up to six months of the initial loan. Meaning new ownership will not have to pay on the loan for their first six months of ownership, which will then assist in building up their cash flow. The SBA also is expected to provide a 90-percent guarantee to the bank, which is up from 75 percent now. That should increase banks’ willingness to provide more flexibility and is one of the reasons we expect 2021 to be a banner year.

When Joe was asked by the time a business broker gets involved, do you have time to prepare the business for sale or are you writing the offering memorandum and going to market?   He answered, it’s a little bit of both.  Sometimes we work with owners who anticipate selling in the next one to three years and want a plan on what to do before its time to bring it to the market. Others have already worked with people like Kelly and Kristina and are ready to go. They just need us to take it to the open market in a confidential manner. In either scenario, our first step is always to sit down with the business owner and understand their overall goals and objectives and provide them with the necessary information to make an informed decision on when the right time to sell is.

Selling your business is probably one of the biggest decisions you are going to make. You want to have the best experts in your corner to help you make an informed decision and make sure you are fully protected throughout the process.

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