Independence by Design™ #435: The New SBA Playbook for Acquisitions with John Thwing
SBA loans have always been a key tool for financing business acquisitions, but recent changes have opened up new opportunities for both buyers and sellers. If you're thinking about selling your business, acquiring one, or financing a transition, these updates could have a major impact on your strategy.
In this episode, I sit down with John Thwing ("The SBA Guy") from Live Oak Bank to break down the biggest changes, including how SBA loans now allow for partial buy-ins, why internal transitions are more viable than ever, and what banks are really looking for when funding deals.
We also dive into how liquidity is often a bigger risk factor than leverage, why most business owners overestimate their company’s valuation, and how to structure financing to align buyer and seller incentives.
If you’re considering a transition and want to understand how SBA loans fit into the picture, this episode will give you the insights you need to make a smart, strategic move.
John Thwing ("The SBA Guy") is an SBA lending expert with decades of experience helping buyers acquire businesses through structured financing. As a leader at Live Oak Bank, one of the nation’s largest SBA lenders, he specializes in creative deal structuring, working capital strategies, and helping acquisition entrepreneurs navigate the loan process. Over the years, he’s funded hundreds of business purchases and has become a go-to resource for anyone looking to buy or sell a business using SBA financing.
Chapters:
- (00:00) Introduction: Why SBA Loans Create Life-Changing Events
- (07:16) Understanding The Financial Story Your Business Tells
- (17:47) Three Types Of Buyers In The SBA Acquisition Market
- (26:05) How Post-COVID Business Trends Impact Bank Decisions
- (32:13) What Makes A Business Viable For SBA Acquisition
- (41:50) Liquidity Vs Leverage: The Risk Dynamic Most Miss
- (46:15) Breaking Free From The Owner-Operator Financial Trap
- (50:29) Why Working Capital Makes Or Breaks Acquisition Deals
- (1:01:48) Internal Vs External Buyers Transition Risk Assessment
- (1:16:03) New SBA Partial Buy-In Rules Creating Flexible Exits
- (1:26:06) Matching Capital Structure To Real Business Goals
- (1:31:03) Final Advice For Healthy Transitions While Still Growing
- Tune in next week for Shannon Susko of Metronomics
- Rate, comment, and share with the owner/operators you know!
Ryan Tansom is a seasoned entrepreneur, speaker, and the founder of Independence by Design™, a transformative ownership framework for growth-oriented business owners. After turning around and selling his family business in an eight-figure exit, Ryan spent over a decade dissecting the lessons learned from his journey. His mission is to help other business owners avoid the pitfalls he encountered by providing them with the tools and knowledge to align their business operations with their personal and financial goals.
With a deep understanding of the challenges faced by owner-operators, Ryan developed Independence by Design™ to empower owner-operators to create sustainable cash flow, grow their company’s equity value, and achieve true independence. He has shared his insights on hundreds of stages, including Vistage, EO, and industry associations, and has reached over 500,000 listeners through his podcast.
Ryan is passionate about helping business owners get unstuck from the day-to-day grind and design a business that serves their life, not the other way around.
Resources:
Live Oak Bank https://liveoakbank.com
John Thwing LinkedIn https://www.linkedin.com/in/johnthwing
Independence by Design™ Workshop: https://ryantansom.com/independence-by-design-workshop
Independence by Design™ Ownership Coaching: Ryan Tansom’s Ownership Accelerator programs and coaching https://ryantansom.com/coaching
Ryan Tansom Website https://ryantansom.com/
Ryan Tansom LinkedIn https://www.linkedin.com/in/ryantansom/
Ryan Tansom Twitter https://twitter.com/RyanTansom
Ryan Tansom YouTube https://www.youtube.com/@ryantansom
Ryan Tansom 30-Minute Ownership Strategy Call https://calendar.app.google/tsKk7z6ohugDchWq8
Sound Bites
“Most small business owners take out almost all of their profits—but that doesn’t mean the business can support a leveraged buyout.” – John Thwing
“Buyers should always be looking at probable deals, not just possible ones. A lot of what you hear online is technically possible, but it’s not how banks actually fund deals.” – John Thwing
“The balance sheet tells the long-term story of a business. The income statement is the spigot, but the real health of a company is in the tub—the balance sheet.” – John Thwing
“If a seller waits too long to exit, the business’s health can deteriorate beyond what’s fundable. You don’t want to try selling when things are trending downward.” – Ryan Tansom