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  • Show Me the Money!!! The Fundamental Ask of a Business Broker

    Mar 22, 2022

    The professionally facilitated sale of a privately held company is a sophisticated, nuanced process requiring knowledge, experience, and skill incorporating accounting, tax, investment, legal, sales, business consulting, and finance elements.   However, at the same time for a sell side representation firm of IBA’s reputation and caliber, the task assigned to us by our clients is fundamentally a simple one consolidated into the iconic catch phrase from the movie Jerry Maguire, “Show Me the Money” (https://www.youtube.com/watch?v=HaDRMwypR1I) for why does anyone from a professional athlete to business owner hire an agent/broker? The answer is to get the best price value available with the smoothest process and the minimum amount of disruption.

    The first element of successfully “showing a client the money” as a business broker is to deliver an executed letter of intent with satisfactory price and terms for sale.  This achievement requires the ability to create a robust marketplace within the constraints of maintaining an environment of confidentiality; persuasively selling the history, business model, and operations of the company; and justifying a strong value to a potential buyer.

    The second element often involves finding the buyer the money to do the deal, as it is rare that a party purchasing a business has 100% of the cash necessary secured and available for deployment.  One of the assets being secured when selecting a business broker is their Rolodex of collaborative partners.  A successful business brokerage firm or mergers & acquisitions intermediary will have established relationships with a number of bankers and the ability to introduce buyers to lenders interested in financing a specific deal based on its location, industry, and the type of loan desired.  In many cases, a deal may have been pre-flighted for financing, so the banker is knowledgeable about the business and only needs to add the capital injection of a specific buyer, their relevant experience, and credit history to finalize preliminary underwriting and issue a letter of commitment.  IBA has consistently over its 47 year history been one of the top lead generators for the banking community for business acquisition loans in Washington & Oregon.

    The following are the loan rankings for the last federal government fiscal year for the Seattle SBA District:  https://www.bizjournals.com/seattle/subscriber-only/2021/12/17/sba-lenders-by-7a-loan-value.html and Portland SBA District: https://www.bizjournals.com/portland/subscriber-only/2021/11/26/largest-portland-district-sba-lending.html

    IBA’s transaction production out of its offices in Bellevue, Portland, and Spokane by our experienced, knowledgeable, double-digit team of highly skilled intermediaries contributed significantly to the performance of some of the top lenders in the region including Key Bank, U.S. Bank, Umpqua Bank, Live Oak, Banner Bank, Columbia Bank, and Heritage Bank.  We thank each of them, and the smaller volume lenders we worked with on select deals during the last government fiscal year, for their diligent, customer service focused efforts helping buyers navigate unfamiliar territory in pursuit of their entrepreneurial dreams, including frequently the simultaneous acquisition of owner occupied commercial real estate.

    Money secured from lenders and/or investors to supplement the buyer’s own capital injection, the champagne can be popped at the closing table and a business owner literally shown the money either with a check suitable for copying and framing or a wire transfer.   IBA has participated in celebrations of this nature over 4200 times in our history.  An occurrence necessary for our business model to work, as few business brokerages operate with our 100% paid on performance business model where fees are only paid by happy clients who achieve their transaction objectives.   If you are interested as an entrepreneur of “Being Shown the Money” in 2022, we would welcome the opportunity to provide you with an overview of our client services.

    IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

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