What's going on in the debt markets? - Acquisitions Anonymous 210
Acquisitions Anonymous - #1 for business buying, selling and operating
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The Cost of Capital in a Rising Interest Rate Environment
SBA debt is kind of the cheapest on a relative cost of capital basis. depository lenders who are going to hold the loans on their own balance sheet, but non-SBA, slightly more expensive. SBA doesn't allow earnouts, not real earnouts. So they take one of those away from you when you're trying to do an SBA deal. And so now what you really have left is seller notes, what we call forgivable seller notes that are not tied to new growth, but they're tied to maintaining some historic level of performance. That's going to play out really interestingly. For sure, it could be good idea for carrying bigger notes and carry better terms
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