Over the past year, practitioners have had to deal with a deadly pandemic, a flood of PPP loans from business clients along with the normal rigors of running a practice. Many of you may face the loss of business clients that will not survive the pandemic. Other practitioners, nearing retirement, may finally say “no mas” after going on record that they would work only one more year after the Great Recession of 2008/2009.
The new reality is that Practitioners with smaller practices, or those who want to sell a certain segment of the business, may be a good fit for someone who wants to replace clients lost due to the pandemic. There will be some noticeable changes in the process due to the pandemic. Buyer and seller meetings may be less frequent and more virtual. Over the last year, I have noticed that deal structures are requiring more flexibility. True up clauses or revenue price adjustments are the general rule and not the exception. True up clauses are necessitating good seller transitions.
Financing will be available through both the SBA and conventional channels though deals under 200k are often done without bank financing. Current SBA programs are offering incentives to borrowers, but one needs to be careful when choosing an SBA lender. Some SBA lenders will not allow true up clauses that allow for the adjustment of a purchase price. Ices are
Larger practices are also being listed and sold. In many cases, the dynamics are the same except they generally involve more people and larger levels of financing. Transition stress can be mitigated especially if one or more partners are willing to stay on in some capacity after the closing.
If you are interested in a growth strategy (buy-side) or exit strategy (sell-side), please feel free to email me at cliff@nationalaccountingsales.com or call me at (914) 722-2019.
Cliff Reiter
National Accounting Sales, Inc.
