Malvern, PA -- Art Blumenthal LLC, an automotive aftermarket-specific business broker, is utilizing the 3-week window created by the end of the federal government shutdown to expedite the closings of tire and auto service shops that have been stalled for the past month due to lack of loan guarantee processing of the Small Business Administration, a U.S. government agency.
The SBA 7a loan program is one of the most popular methods for financing a well-established business acquisition that involves purchase of inventory, equipment and goodwill, he said. Under this program, banks may fund up to 90 percent of the acquisition cost, plus additional working capital, to a qualified buyer candidate with a 10 percent cash down payment.
"So if someone was in the process of obtaining an SBA loan guarantee to purchase a tire or auto service business, their entrepreneurial dreams were put on hold," he said. "Established shop owners seeking funding for growth by expanding their number of sites also have had to wait.”
SBA loans are a mainstay for many entrepreneurs, who can be approved for attractive bank financing to borrow funding to buy, start, expand or run a small business. While the SBA doesn’t directly fund small-business owners, the most popular 7a program covers 75 percent of loan losses in the event of a default, giving an incentive to banks and other financial institutions to finance business acquisitions that might otherwise appear to risky.
“Like other aspects of the economy, when a business transaction like this is put on hold, it has a ripple effect that impacts a myriad of circumstances," Blumenthal noted. "I have a buyer client eager to close on acquiring expansion locations and a seller ready to complete a sales transaction, pay off all debts and commence a well-deserved retirement. Eager, young entrepreneurs just acquiring a new tire or auto service shop can be negatively impacted if they are counting on an SBA/bank loan to hire new employees, purchase new equipment and inventory, renovate the building, replace signage, and implement new advertising.”
About Art Blumenthal LLC
Established in 2010 and leveraging over 35 years of experience as both an aftermarket business owner and aftermarket technology executive, Art Blumenthal LLC (www.art-blumenthal.com) provides business intermediary and advisory services to both buyers and sellers of industry businesses of all sizes. Blumenthal is a member of the International Business Brokers Association (IBBA), representing a network affiliation of 2,000 business brokers in all 50 states, which leverages and strengthens nationwide reach. He is a Certified Business Intermediary (CBI), having completed IBBA’s rigorous educational, testing, and experience requirements to become accredited.