Using Investors to Buy a Business with SBA
Acquiring Minds
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How to Make More Money in a Small Business
The threshold for that, as you said, is 20%. No one, no outside investors ever going to want to own 20% or more of the business. So if there's a preferred return on top of it, often it's actually 13% of the ownership. And so when I say 20% economic interest, the SBA looks at it is hey, that 10% preferred interest rate has economic interest in addition to common, common ownership.
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