2min chapter

Made You Think cover image

79: The World's Oldest Story: Epic of Gilgamesh

Made You Think

CHAPTER

The Modern Definition of Europe Is Different Than the Ancient One

Theory that i heard for the interpretation of the bible switching to literal was actually that it started out witlike, the early european scientists using they were discovering to prove pieces of the bible. The definition of europe mix is though, all like fakce and thenthrown te notes, whether i'm right or wrong. Then you have the christian north of the mediterranean, moslem south of the med Mediterranean, cultural divide. So that, to me, would suggest, like what you're saying is totally possible, because you're baselyr replacing each other on the same land as py some hand off and intermingling.

00:00
Speaker 1
Well, that'll generally get because either the size is too big or they can leverage a conventional loan because of the cash flow that they got, et cetera. Based
Speaker 3
on their balance sheet and strength, some strategics are going to look at me and my solution and go, oh, we don't need that guy. So the key is, does the source of capital fit the buyer's needs? Now, some of the changes that are going on in SBA SOP or standard operating procedures are going to liberalize a little bit of that. So SBA might be a fit more often than it was previously. So one other thing to keep in mind, an important thing to keep in mind with an SBA loan, unless it's an ESOP where there's no owners over 20%, an SBA loan is always going to require a personal guarantor. And that's where private equity funds and some strategics, they say, no, no, no, we really want non-recourse debt,
Speaker 1
recourse being a personal guarantee. But what personal guarantees aren't in the hit list for a P-E firm?
Speaker 3
So in the SBA world, I would say that's a first-call conversation. By the way, we're going to have your unlimited personal guarantee. If it's more than one owner, going to be jointing several guarantee. And that guarantee may be collateralized with a lean on home, for instance. So that does make it a different form of capital, but it makes a great one for people who want to buy. And I can also lend at higher leverage than, for instance, senior debt on a P-E deal with. So SBA has the downside of the guarantee, but it has some upside as well. And in terms of size, SBA maximum is $5 million for a specific borrower or affiliated borrowers. But that doesn't mean the transactions deal size is limited to $5 million. We often play in the $5 to $10 million range, and we're combining both SBA and conventional bank dollars via what is referred to as periposuit for shared lean position or combination financing. For me, that $3 million to $10 million enterprise value is really the target, driven by SBA, but often with conventional bank dollars in addition.

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