Tree Trimming Case Study

Financing Scenario

Tree Trimming Business Case Study

Buyer acquired an existing Tree Service Business. The company was acquired by the current owner from the founder in 2010. The company specialized in residential tree service and tree removal services. This transaction was an asset sale.

Purchase Price $ 2,100,000

Loan Structure

Purchase Price $2,100,000
SBA Fees/Costs $115,500
Working Capital $150,000
Total Project Cost $2,365,500
Seller Note $210,000 (10% of Purchase Price)
Buyer Equity $355,000 (15% of the Total Project Price)
SBA 7a Loan $1,800,500

Seller Note Terms

the seller note had a term of 5 years with zero payments of principle or interest for the first 12 months. Typically, an SBA lender will want to see 7-10 year term on the seller note. In this case, the cash flow from the business was strong enough to support a shorter repayment term of 5 years. The 12 months of no payments was included to provide buyer time to build up cash flow before beginning to make the payments on the seller note.

Loan Terms

Term 10 Years
Amortization 10 Years
Estimate Payment $2,000 (approximate – based on Wall Street Journal Prime Rate + 2.75% (SBA Maximum)

Personal Credit

Average Credit Score 800

Additional Collateral Pledged

Buyer pledged primary residence as collateral for the loan.

Total Cost

Remember your total out of pocket costs will be higher than those costs estimated within the SBA loan as they vary by transaction. Additional costs to consider:

Life Insurance Policy
Business Insurance Policy
Title/Transfer tax on vehicles included in the sale
Attorney costs
Relocation costs

Why Work With Us?

Extensive experience helping to buy a business using the SBA 7a loan program.

There is no substitute for extensive SBA 7a financing acquisition experience. Every transaction is different. Every transaction is completely custom. These transactions require an expert to get you the best terms possible, guide you through the process from start to finish, and make sure there are no surprises on the closing statement. Choose your SBA professional carefully!

FINANCING SCENARIOS