Business Brokers Dallas TX | Mergers And Acquisitions

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How do you sell your business with an existing PPP Loan?

Are you considering the sale of your company, but there is still an existing "Unforgiven" Paycheck Protection Program (PPP) Loan issued by the Federal Government to your business? Could you sell your company with an existing PPP Loan? Would the bank who issued the PPP loan allow you to sell? Would the lender who is issuing the loan for the acquisition of the business fund the deal with an existing PPP Loan? Our team of advisors have recent experience in this scenario, selling companies with an existing "Unforgiven" PPP Loan in place.

It's important to first understand what a PPP Loan is. It is essentially an unsecured debt issued by the Federal Government in 2020 through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses, self-employed workers, sole proprietors, certain nonprofit organizations, and tribal businesses continue paying their workers. The loan proceeds may be used to cover payroll costs, rent, interest, and utilities. The loan may be partially or fully forgiven if the business keeps its employee counts and employee wages stable. However, as of the time of this article, most PPP Loans have yet to be forgiven. How does that impact the sale of your company?

When the Federal Government initially passed the CARES Act, there was very little guidance in terms of the treatment, repayment or forgiveness of these loans, particularly in the event the business was to be sold. As many businesses began to go-to-market in the later part of 2020, there was sufficient pressure in the market, including deals we were working on, to force the Federal Government to address this issue.

Here's the latest guidance. A PPP borrower may sell their business during the period when the PPP loan is outstanding and before forgiveness has been granted. In this case, proceeds of the sale in an amount equaling the outstanding PPP loan balance must be placed in escrow with the PPP Lender to cover the outstanding balance of the PPP loan if the loan isn’t forgiven. Seller and buyer must work with the lender (or the Lender that is servicing the PPP loan) to have the buyer assume the PPP loan and continue to use any remaining PPP loan proceeds for payroll costs and other eligible payments of mortgage interest, rent and/or utilities in accordance with PPP requirements. Once all requirements have been fulfilled, and the PPP Loan has been forgiven, then the escrow balance is released by the PPP Loan issuer, to the seller.

A forgiven PPP Loan is not considered taxable income and Additionally, with respect the lenders reporting cancellation of debt (Form 1099-C), IRS announcement 2020-12 published on September 22, 2020 notifies lenders that they should not file information returns or furnish payee statements to report the amount of qualifying forgiveness with respect to covered loans made under the Paycheck Protection Program (PPP). Feel free to contact Trinity Transaction Advisory for additional guidance.

Trinity was a great leader through the whole process. I had a huge comfort level about it, the professionalism they brought to the table. They had a team of Advisors that I could talk to directly, it was a whole team effort. I didn’t have to compromise the value at all. The most amazing thing to me was how they only brought business buyers to the table that had the means to make this happen. If I had to do it again, I would do it with Trinity Transaction Advisory.
- Dennis Denson, Print Central, Inc.

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Latest News

Recent Acquisition: Alexander Electric

Trinity Transaction Advisory, LLC (Trinity), a transaction advisory firm and a leader in privately held merger and acquisitions in the lower middle market, is pleased to announce the recent acquisition of one of its clients’ companies, Alexander Electric, Inc., domiciled in Lufkin, Texas, by KH Commercial, LLC.,

Alexander Electric, Inc., a mid-size Commercial, Industrial and Institutional Electrical contractor in Southeast Texas, performing new buildout and maintenance of electrical contracting work for schools, industrial plants and commercial buildings. The company possesses a strong management team, quality talent, excellent working relationship with large general contractors, and has a solid reputation boasting a 30+ year track record for quality workmanship, experienced team, and client satisfaction.

In a recent interview, former CEO, Gary Alexander described their work with Trinity as follows: “I was thrilled with Trinity throughout the whole process…..they were the best! If I had to do it all over again, I'd do it with Trinity.”

KH Commercial LLC., founded and operated by Kurt and Hein Keller, brings vision, technical and management expertise to the already successful management team. The company is well capitalized and has a strategic approach, acquiring Alexander Electric as a platform company from which they could bolt-on future assets.

Alexander Electric was exclusively represented by Trinity Transaction Advisory, LLC, and comprised of the deal team of Gerald Kong, Senior Advisor, Negotiation and Structuring; Monty Walker, Tax Analysis and Deal Structuring; and Brian Wendler, Business Valuation and Structuring. The transaction was funded by a blend of equity injection and 3rd party financing funded by Midwest Regional Bank, represented by Sam Criales.

About Trinity Transaction Advisory

Under the Hood

Trinity Transaction Advisory utilizes a unique 7 stage merger & acquisition system to help business owners and shareholder realize higher offers, higher closing rates, lower transactions fees, and an overall more effective transaction process.

Since 2002, Trinity Transaction Advisory in Dallas has been helping buisness owners of lower middle-market companies to plan, strategize and execute exit and divestiture strategies by deploying a team approach to a multi-stage process with proven results. As Merger & Acquisition (M&A) business brokers, we maintain better than a 90% closing rate, well above the 15% average closing rate of traditional business brokers.

How Business Brokers Can Help Business owners

Business owners deserve real answers and a candid perspective of their business. An initial feasibility analysis is deployed to help determine the strengths, weaknesses, and overall marketability (chances of selling) of the company. The analysis allows sellers to determine how business buyers view their company and identifies which attributes are attractive and which attributes need development. Curing certain areas would not only improve chances of selling but would increase overall value. This is a critical analysis for anyone contemplating selling their business.

Business brokers at Trinity Transaction Advisory take a holistic view of the company and deploy a team approach to have access to a professional team at every turn; from value assessment, to contract negotiations, to tax mitigation strategies.

The company was founded with a unique concept in mind: providing superior options over the traditional business broker model; implementing solid exit solutions; substantially improving our clients’ chances of selling, while increasing value to our clients.

Business brokers at Trinity Transaction Advisory Dallas are certified in Mergers & Acquisitions, Business Valuations, Equipment Appraisals, Tax Analysis and provides a refreshing approach to negotiations and deal structuring.

Trinity Transaction Advisory, LLC, is a proven leader in private business Mergers & Acquisitions, sales strategies, and exit solutions. We are your expert team in the Texas market, transacting throughout the state; including the Dallas/Fort Worth metro area, Houston, San Antonio, Austin, West Texas, and East Texas. Trinity will provide guidance in business value, pre-market preparation, marketing, and positioning, handling the unique tax implications of the business sale, and will work diligently to see that you reach your exit strategies and goals.

Visit our testimonials page to see actual video recordings of what our clients have to say about us. This could provide insight into how we conduct business and may address issues germane to your industry. Contact Trinity today to find out how we can help you experience excellent results. Learn about our Business for Sale Listings or how to buy or sell a business today!

Call Now: 972.238.8400

Merger & Acquisitions

"At Trinity Transaction Advisory,
we surround each transaction with a
professional team of Advisors"

The Trinity Transaction
Business Advisory Difference

Featured Article

How do you sell your business with an existing PPP Loan?

Watch Actual Clients Experience With Trinity

Latest News

Recent Acquisition: Alexander Electric

About Trinity Transaction Advisory

Take the Next Step

How Business Brokers Can Help Business owners

Call Now: 972.238.8400

Merger & Acquisitions

"At Trinity Transaction Advisory, we surround each transaction with a professional team of Advisors"

The Trinity Transaction Business Advisory Difference

Featured Article

How do you sell your business with an existing PPP Loan?

Watch Actual Clients Experience With Trinity

Latest News

Recent Acquisition: Alexander Electric

About Trinity Transaction Advisory

Take the Next Step

How Business Brokers Can Help Business owners

"At Trinity Transaction Advisory,
we surround each transaction with a
professional team of Advisors"

The Trinity Transaction
Business Advisory Difference