Tom Lyons
@SBALenderLyons
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7,487
Following
561
Media
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1,917
I provide SBA loans to folks buying businesses or expanding existing ones. My tweets are mine, not my boss's. I love the funeral biz & I ref HS basketball.
Madison, WI
Joined March 2021
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Send us removal request.
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@dollarsanddata
I have seen worse.
If there's a CBA, then call your union rep because at best that language is ambiguous.
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1
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Had lunch with a customer who is buying a business at 4.1x EBITDA. With 19% down, his cash-on-cash return is at least 65% per year.
He's arguing with me for a quarter point on my interest rate.
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4
145
I was talking to an individual today intending to make a $840K down payment on a business with $2.2M in EBITDA. After my debt service, they'll still net $1.06M for a 126% cash-on-cash return (excl. tax benefits).
You may dislike the
#SBA
loan option, but it loves you.
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6
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A wire is going out this morning for a $5 million loan to buy a healthcare staffing company!
How much in collateral? About $150K of home equity and some term life insurance.
We just changed MULTIPLE generations of this dude's family tree.
Is this a great country or what?
25
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134
Closed on the acquisition financing for a trucking company yesterday. 3x EBITDA and 10% down!
Boom goes the dynamite.
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That sound you hear is your calendar signaling a new quarter. I need to get $20.9 million in loan requests to underwriting by 3/31/22. Anyone buying a
#smb
or refinancing debt to an existing one?
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Here's a first.
Remember how
#SBA
lenders need to get IRS transcripts to verify the seller's tax returns match what they gave you and what the seller gave IRS? I have a deal now where the seller filed one set of returns, gave another to the buyer, & never thought we'd catch it.
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Let’s all say it together now: when you are selling your business, that means you are also selling your business’s inventory.
I really did not think that this was hard.
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Every day is a gift.
I have a friend who passed 10 years ago at age 33. Something about a undiagnosed clot in her brain. Super healthy, married my college roommate...bam, one day she just collapses.
It's
#cliche
, but it warrants repeating: every day is a gift.
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@SMB_Attorney
There’s a
@30Rock
episode about this when Jack goes to Liz’s high school reunion during an existential crisis.
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When attorneys' invoices both disclose their hourly rate and show me activities that prove they weren't worth said rate, God kills a puppy.
Either you know what you're doing, in which case you didn't need the 30 hours you billed me, or you're not worth $495/hour. Pick one.
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Before you ask: no, I cannot prequalify you. That's not a thing in commercial lending, least of all in the
#SBA
space.
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@SMB_Attorney
Go easy on your officials. You’re going to end up with 12 year old kids just getting their start into officiating. You will also have parents who embarrass you by their misconduct.
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"You see, on a projected basis we're only asking 5x SDE as opposed to the 12.5x that historical numbers would indicate." - an actual email from a seller's broker on a deal going nowhere.
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1
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Closing scheduled tomorrow for a
#SMB
acquisition of an RV rental facility. Killed it the last two years. Sales price is 2.9x EBITDA, biz val came in just a smidge higher.
There are still deals out there!
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Mrs. SBALenderLyons and I are celebrating 20 years this weekend.
Life is good.
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A husband-wife customer owns a memory care center & called last August contemplating a divorce and feeling us out on how to release a PG for one of them.
They called today, have since reconciled, have a baby on the way this summer and now are looking at an expansion loan.
:-)
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@SMB_Attorney
I'm sorry, are you claiming Grayson Allen's most punchable of all punchable faces as a SELLING point and THEN daring call yourself the objective one?
I am not tripping, you are tripping.
Case dismissed.
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Yes, when you sell your business the bank will make you pay off your loan.
I thought this was obvious, but I guess not.
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@ExitMultiple
@TrungTPhan
@SuperMugatu
I valeted a car for a Sweet Baby Rays executive in college. He tipped me with a coupon for a free bottle, which I used to procure my first bottle. I've been a fan of the brand ever since, moreso for his tip than for the underlying sauce.
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I have a deal on my desk where the SDE is $154K. The seller's asking price? $2 million. That's an 8% ROE in a world where a GM is unnecessary or works for free.
1-year treasuries are paying 5%. Does the 3% difference cover your equity risk? Because it wouldn't mine.
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Q. When should you start talking to your
#SMB
lender about acquisition financing?
A. Just before you're under LOI.
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1
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$4.2MM packaging
#SMB
is on my desk. Owner died last year and now the sister is running the show while winding down for an exit.
Buyer is telling me all the growth plans he has after the closing, and then tells me that for bookkeeping the seller uses...Excel.
Opportunity!
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Be responsive, professional, and if at all possible likable.
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If your seller or their attorney have an email with
@aol
.com as the domain...I wouldn't say that's a dealbreaker but it's likely a red flag.
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Dear
#SMB
sellers: your buyer will need capex you're not showing on your P&L in order to run the business you're selling.
If I propose a number, and that number is < what your bal sheet is actually showing you're capitalizing, then we have a You problem and not a Me problem.
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2
25
Here is a question you have to know: how much cash will you need on day 1 in order to properly run your
#SMB
target?
If you close on day 1, bills are due on day 20, receivables aren't collected until day 40, and payroll is next week...the answer is more than $0.
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2
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@just1nvest
@McConnellMuse
@WNBA
I officiate and I can explain.
In transition, you are watching for the legality of defenders in the event of a block-charge. You have to make a tradeoff; you skip the dribbler.
This call 100% should have been made, but transition violations offense are the easiest play to miss.
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0
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My 11 yr old asked me for chores I would pay him to do. I told him he ought to bike around our hood, find the lawns needing mowing, knock on their doors and offer to cut grass for $20. Saturday morning he did so and got his first customer.
I don't think I could be more proud.
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0
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@cullenroche
I have a customer with a futures position betting on a 2023 interest rate hike. He "only loses if rates go negative, which can't happen" (his quote). I hope he's right, but I can also see the Fed saying hold my beer...
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@SMB_Attorney
I've studied Spanish, Italian, German, Russian, a little Latin, and I'm just starting Swahili.
I can say from experience: the more languages you try to learn, the easier it is to pick up the next one.
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Paying 6x EBITDA for a business is fine if you think you can grow the thing.
Paying 6x EBITDA with 100% leverage doesn't work.
Because math.
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21
$5MM wire just went out for a deal to an existing customer to buy an electrical motor manufacturer!
If you ever meet me live and get significant alcohol in my system, let me tell you about the the world's hand-hold-iest seller.
For now, though, celebration!
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19
Here's some basic math that comes in handy.
1. Take your seller's ask as a multiple of SDE.
2. Take the inverse of that multiplier (1 / multiple).
That's the rate of return a cash buyer would expect.
If you can get that risk-adj. return elsewhere: the deal is overpriced.
0
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19
When a broker doesn't have their borrower under contract but calls me into a sales pitch to the borrower to help Mr. Broker get Mr. Borrower under contract, then 3 things happen. I am doing free consulting, I lose respect for our broker, and God kills a puppy.
2
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18
Buyer: What will my rate be?
Me: Plan on this being the most expensive loan you've ever borrowed. No higher than P+275.
B: I wouldn't even do the deal at a rate that high.
Me: Your numbers say that after servicing debt your cash on cash return is 36%.
B: You got me. Let's do it.
1
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18
No, I can't do a 30 year amortization on your startup in leased space with no collateral. No lender can. For a hundred different reasons.
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If your seller has off-book income, fine whatever.
If your seller has off-book income *and* insists on factoring it in to the price or structure of the deal, just stop.
Don't waste time with pleasantries, you are not dealing with a serious seller. Cut bait.
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You know how Microsoft lets you highlight text and change the font, change the size, bold it, whatever?
There ought to be a way you can do that and convert to or from Caps Lock.
Why does this not exist yet?
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@SWHesq
@NateAFischer
I love that it was Ed Hochuli that was used for logical fallacy officiating. It's too perfect.
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@SMB_Attorney
@LisaGForrest
25 year term/amort., 5-3-1 prepayment penalty, rate cannot by rule exceed Prime + 275. Buyer's choice on the down pmt: a) 10% with a lien on your house, b) 15% with no house if ur lender allows 85% LTV, or c) enough down for your lender to consider themselves "fully secure".
1
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Deal lands on my desk at 4.5x EBITDA. Great! Except it's actually not EBITDA, but adjusted EBITDA. Ok. Wait, it's not adj. EBITDA, it's adj. SDE.
So, if all of the seller's proposed addbacks work and a buyer can work for free, an all cash buyer would get a 22% ROE.
4
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17
Stepping into a meeting to get a deal aproved at not quite 2x SDE. We don't see too many of these, it's a thing of beauty really...
5
1
16
@mar5hallhoops
I'd make sure my coach has my phone and email in case there's a problem with my kid or they need me to help out with concessions sales or something.
Otherwise, my kid's coach coaches and I parent.
Why would I need a conference with my kid's coach?
1
0
17
Not sure who needs to know this, but whenever your
#SMB
target has an airplane you're going to want to go ahead and either pay cash for the deal or throw that on the "excluded assets" list.
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@bailey_gay
You know how the rulebook for monopoly says that the bank can’t run out of money and that you’re authorized to use little slips of paper if you run out of monopoly cash?
That’s 2008.
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Walked out of loan committee with approval for a zero down deal! Boom goes the dynamite.
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16
If I go to Google and I type in your name, company, and city/state and I don't get a webpage with your phone or email on it...I'm moving on to your competitor. It's just that simple.
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So you're paying off your
#SBA
7A loan. Congratulations! BTW, there's a 21-day min. interest charge for a payoff, so even if you're out of the prepayment penalty phase (if any) you still want to give your lender a 3 week notice lest you pay interest on the same money twice.
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16
#SMB
buyers: When I issue a commitment letter, your seller does not need to see that unless you already conditioned you'd do so in the LOI.
They can get a good look at a T-Bone by shoving their head up a bull's a$$, but on this they should just take the butcher's word for it.
3
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16
Bankers, here are 2 things you can do that 0 of your competitors do. 1, hand-write a thank you note after a closing. 2, park the customer's birthday on your calendar and call them when it comes up. Neither will be expected, & this costs you 5 minutes once plus 5 minutes per year.
3
0
16
Has anyone else noticed auto dealers changing the layout of parked vehicles on their lot so as to presumably disguise the relatively small size of their inventory?
4
0
14
Anyone have a potential
#SMB
target in Delaware? We've financed deals in 49 states, but that is the one we're missing.
Lunch is on me if someone can provide a qualified lead in the Blue Hen State.
6
1
15
I'm going to say something obvious, factually correct, yet something we're trained to doubt.
Equity costs more than debt.
5
1
15
Honest question: does a missed call imply an expectation that the one being called call right back? Assume there is no voicemail, text, or email follow up...just a straight missed call.
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@Budgetdog_
The truth is less black and white than what you're making it to be. Taxing authorities often retain owner's equity after a foreclosure. Tough to say there isn't a shade of truth in this statement if you only keep your equity on a conditional basis.
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14
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0
14
Every time a bell rings, an angel gets his wings.
Every time I hear someone share an
#SBA
rule that isn't a rule, I know the program was blamed for the error(s) of a lender who probably didn't know what they were doing.
Zuzu Bailey's voice works better for the first one.
1
1
13
When you apply for an
#SBA
loan, you will sign a form telling your lender if you have ever been busted for a crime other than a minor motor vehicle violation. Depending on the timing and the severity of the incident, it can either be no big deal, a delay, or a dealbreaker.
3
3
11
You can close with zero down? You can close with zero down.
That's not a typo. Just had one this morning.
Happy weekend!
5
0
14
Just walked out of loan committee with a 0% down business acquisition approved!
What are you doing on this long weekend? :-)
3
0
14
@SMB_Attorney
I had a colleague with a closing on a Monday. Borrower walks in wearing a ring. "What's that?" he says. "I got married this weekend isn't it wonderful?" Well...we're tearing up these docs, getting your new wife's sig on everything and re-running background. See you in 2 weeks.
5
2
14
@GoodsCapital
My daughter had heart surgery 3 years ago. 3 surgeons in the world could have pulled off a procedure so technical, and all 3 are in the US.
LOTS wrong with US Healthcare, but if you have acute trauma this is where you want to be.
2
0
14
Inside of a bank, we abbreviate "thousands" as "M", but non-bankers use M to mean "millions". For example...
10M = 10 million to non-bankers, but 10M = 10,000 to a bank. (10MM = 10 million to a bank)
One of my unwritten job description items is translating accordingly.
6
1
14
Please, please don't book a call with me to help sell you to the seller only to no-show us, leaving me alone with your seller.
No good can come of this.
4
0
11
You know something that
#SMB
sellers often do? They price their inventory over and above the value of the business as a separate line item.
Most DON'T do this (thankfully) but enough do that it's tweet-worthy and a stone in my shoe.
BTW, don't fall for this on the buy side.
4
0
12
#SBA
applicants: when the bank needs a 10% down payment, we measure that against all uses of funds.
If your purchase price is X, and your seller is willing to finance 20% of X, we determine your down payment on X plus closing costs and working capital. Not 80% of X.
:-)
2
0
13
Buying a business from Mom or Dad and you expect a sweetheart price? Run it by the CPA first. IRS is looking to wet their beak, so this is an instance where we'll want to see the price was high enough to keep them out of your family's lives post-closing.
1
0
13
@EndresenHeather
I'm not going to vote, but you should have a 5th option for "I won't vote but I want to see how everyone else votes."
2
0
13
Just saw a Personal Financial Statement self-appraising their SMB at 39x NOI.
It's ok to privately believe your company is worth that but put a...how do we word this...put a more digestible number down on the form for the bank.
#stylepoints
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13
I'm going to end my 2023 having closed 20 some odd million in SBA loan volume.
I'm also going to end my 2023 having closed 20 some odd thousand in sponsorships for my kid's basketball team.
Being a dad makes me better at my job. My job makes me better at being a dad.
1
0
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@SullyBusiness
When I was 26 my net worth was -60,000. I was introduced to Dave Ramsey. He’s not perfect, but he’s exactly what I needed at the time.
1
0
12
@kelceylehrich
Had a closing in 2016, lawyer charged us $15K to review survey, title, and loan docs. @ $250/hour, this means it took them 60 hours.
Either you suck at your job in which case you're not worth $250/hr & we should fire you, or you're lying and we should fire you.
We fired them.
0
0
13
You can ask for a lot of working capital in your
#SBA
loan request.
You can't ask for a lot of working capital in your SBA loan request and then provide projections that don't indicate you'll need any working capital.
0
0
12
@SBA_Matthias
@StateFarm
@Travelers
Forget that. What's really needed is a private sector SBA Loan Guaranty alternative. Think Fedex to the SBA's Postal Service.
2
0
12
Don't sweat your kids' grades. Sweat your kids' character.
I graduated high school with a 2.5 GPA.
I wasn’t a bad kid but I was distracted as a youth.
In my first semester of community college, I got an internship with Disney that would have moved me from Michigan to Florida.
Frankly, I expected my parents to say “no” to me moving
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Monday is
#President
's Day, or in the banking industry: one more federal holiday that I forgot we get before I booked a bunch of meetings.
0
0
11
Sometimes we get into an industry not realizing that we're going to need to become a quasi-expert on something else necessarily.
For instance, I got into
#SBA
lending, but this somewhat forced my hand to learn more about life insurance than the average life insurance layman.
4
0
11
@SullyBusiness
#1
showed up when I was 24. Heavy cross to carry at the time, but now I'm 40 and she's 16 and this is freaking awesome. Then we had some more, same thing.
0
0
11
A quick PSA re:
#SMB
Loan brokers...if you're too busy to make the introduction to a prospective lender, then you're not adding enough value to justify your part in the process.
There I said it.
1
0
12
It's a Wonderful Life is my favorite movie. Not just my favorite Christmas movie, but my favorite movie all around.
End of tweet.
2
0
12
I have a deal on my desk with a somewhat atypical, complex cash flow from the seller. The seller's broker was totally on top of it and gave me everything I needed in 10 minutes. That guy turned a dead deal into "mostly dead" to "back to life" and won't get credit for it.
4
0
11
How not to close an
#SMB
acquisition.
1. Call several lenders. Decide on an option.
2. Fail to disclose prior felony convictions.
3. Underwrite the deal and move through the closing checklist.
4. Convey to the seller everything is going great.
2
0
11
@sweatystartup
Your son born today will have a ton of other Parkers, Aidens, or Coopers in their Kindergarten class.
If you're trying to be unique, don't skate where the puck is...skate where it's going.
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