Imagine owning a thriving business that generates $330,000 in annual earnings, growing year-over-year, for the rest of your life. Now, what if we told you this dream could be your reality with just $110,000 out of pocket? Intrigued? Read on to discover how savvy entrepreneurs are leveraging SBA loans to acquire million-dollar businesses and achieve financial independence.

In today's competitive market, finding the right business opportunity can feel like searching for a needle in a haystack. But what if I've already found that needle for you? I've crunched the numbers on a million-dollar business acquisition that could yield a staggering 167.53% return on investment in just the first year. Here's the breakdown: 

• Purchase Price: $1,000,000

• Annual Seller's Discretionary Earnings (SDE): $330,000

• Your Initial Investment: $110,000 ($100K cash down plus closing costs)

• Your Take Home Profits after Debt Service: $184,284 in year 1, growing each year as the business grows!

• First-Year ROI: 167.53%

Let's dive deeper into why this opportunity is too good to pass up:

1. Minimal Upfront Investment: With just $110,000, you can control a business valued at $1 million. That's only 11% of the total purchase price!

2. Attractive Financing: Leverage an $800,000 SBA loan (plus another $10K or so in lending fees) and a $100,000 seller note to finance the majority of the purchase.

3. Impressive Cash Flow: After accounting for all loans and expenses, the business still generates $184,284 that goes right into your pocket.

4. Strong Debt Coverage: With a debt service coverage ratio of 1.34, you're in a solid position to meet all financial obligations.

5. Long-Term Wealth Building: As you pay down the loan, your equity in the business grows, setting you up for even greater returns in the future.

Here’s the details:

Financial Benefits After Business Acquisition

Here’s the best part! After a decade of ownership, your investment truly begins to shine. Consider two compelling scenarios:

1. Continued Ownership

   • With the loan fully paid off after year 10

   • Assuming a conservative 5% annual growth rate

   • Your annual cash benefit jumps to $511,939 (see table below)

   • This represents pure profit, unencumbered by bank obligations

2. Strategic Exit

   • Sell the company at a 3.5x multiple of Seller's Discretionary Earnings (SDE) because your profits are now higher and demand a higher multiple

   • Potential sale price: $1,791,786 (3.5 x $511,939)

   • Total returns in year 10: $2,077,672 (cash flow after debt service plus sale price)

   • Enjoy over $200K in average annual stock returns for the rest of your life!

This milestone presents a pivotal decision point: continue enjoying heightened annual returns or capitalize on your decade of entrepreneurship through a profitable exit. Whatever decision you make, you’ll have earned it and achieved a higher level of wealth and satisfaction than you ever could have working a job at someone else’s company. Don't let this opportunity slip away. The path to owning a successful, cash-flowing business is closer than you think!

Are you wondering what businesses are qualified for an SBA loan? I’ll touch on that in a future newsletter. For now, reach out and I’ll be happy to help!

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