Business Acquisitions

San Antonio Business Acquisitions: Buying or Selling A Business Cash, with Seller Financing & SBA-Financed Lending

Buying or selling a business can be one of the most significant financial transactions a business owner, entrepreneur, or investor will undertake. Whether the transaction is a cash purchase, involves SBA financing, includes seller financing, or uses a combination of financing sources, the structure of the transaction and the underlying legal documents can have significant consequences for both the buyer and seller.

C Jackson Law Firm PLLC provides legal guidance to buyers and sellers throughout the business acquisition and sale process, including transactions involving SBA loans, seller-financed business sales, promissory notes, installment payments, and other negotiated financing arrangements.

Serving business owners, buyers, sellers, entrepreneurs, and investors in San Antonio and throughout Texas, our firm assists clients with structuring transactions, reviewing and negotiating agreements, identifying potential legal risks, and coordinating the legal components of the transaction through closing.

A business transaction involves much more than agreeing on a purchase price. Buyers need to understand exactly what they are acquiring, including the company's assets, liabilities, contracts, leases, intellectual property, employees, debts, licenses, and other obligations.

Sellers must carefully consider not only the purchase price, but also how and when they will be paid, what security will protect any unpaid purchase price, the buyer's obligations after closing, representations and warranties, indemnification provisions, restrictive covenants, default remedies, and post-closing responsibilities.

At C Jackson Law Firm PLLC, we advise clients on matters involving:

• Business Acquisitions
• Business Sales and Divestitures
• SBA-Financed Business Acquisitions
• Seller-Financed Business Acquisitions
• Asset Purchase Transactions
• Equity, Membership Interest, and Stock Purchase Transactions
• Letters of Intent (LOIs) and Term Sheets
• Legal Due Diligence
• Asset Purchase Agreements
• Business Purchase and Sale Agreements
• Seller Financing Agreements
• Promissory Notes
• Security Agreements and Collateral Documentation
• Personal Guaranties
• Installment-Payment Arrangements
• Contract Review and Negotiation
• Non-Competition, Non-Solicitation, and Confidentiality Agreements
• Commercial Leases and Lease Assignments
• Entity Formation and Restructuring
• Assignments and Assumption Agreements
• Closing Documents and Transaction Coordination
• Post-Closing Obligations and Business Transition Matters

Buying a Business in Texas

Before purchasing a business, it is important to understand not only what you are buying, but also the liabilities, contractual obligations, financing requirements, and potential risks associated with the transaction.

The structure of the purchase can significantly affect the rights and responsibilities of the parties. An acquisition may involve purchasing substantially all of a company's assets, acquiring ownership interests in an existing entity, or negotiating another transaction structure based upon the circumstances of the business and financing.

C Jackson Law Firm PLLC works with buyers to review and negotiate transaction documents, evaluate legal issues identified during due diligence, and structure the acquisition consistent with the buyer's business objectives.

Our goal is to help our clients enter a transaction with a clear understanding of what they are purchasing, what obligations they are assuming, how the purchase will be financed, what the seller is required to deliver, and what protections are contained in the final agreement.

Buying a Business With an SBA Loan

Many entrepreneurs use SBA-backed financing to help fund the acquisition of an existing business. An SBA-financed acquisition, however, involves more than obtaining loan approval.

The business acquisition documents and financing process must often work together. The purchase price, buyer contribution, seller financing, ownership structure, business assets, commercial lease, closing conditions, and other components of the transaction may affect the financing and closing process.

C Jackson Law Firm PLLC can represent buyers in the underlying business acquisition while coordinating with the buyer's SBA lender and other professionals involved in the transaction.

Our representation may include reviewing and negotiating the Letter of Intent, conducting legal due diligence, reviewing material contracts, negotiating the purchase agreement, addressing representations and warranties, reviewing commercial leases, preparing organizational documents, addressing seller financing, and preparing or reviewing closing documents.

Seller Financing When Buying or Selling a Business

Not every business acquisition is paid entirely in cash or financed exclusively through a traditional lender. In some transactions, the seller agrees to finance a portion of the purchase price, allowing the buyer to pay part of the consideration over an agreed period following closing.

Seller financing can provide flexibility, but it also creates an ongoing financial relationship between the buyer and seller after ownership of the business changes hands.

For the seller, agreeing to accept payments after closing means that a portion of the sales proceeds remains outstanding. The transaction should therefore clearly address the amount financed, interest rate, payment schedule, maturity date, collateral, personal guaranties when applicable, events of default, acceleration rights, late-payment provisions, prepayment rights, and available remedies.

For the buyer, seller financing can provide an additional source of acquisition capital, but the repayment obligations and default provisions should be carefully evaluated alongside the buyer's other financing and operating obligations.

C Jackson Law Firm PLLC represents buyers and sellers in negotiating and documenting seller-financed business transactions.

Depending upon the transaction, seller-financing documentation may include:

• A Promissory Note
• Security Agreement
• Personal Guaranty
• Collateral and lien documentation
• Payment and amortization terms
• Interest provisions
• Maturity and balloon-payment provisions
• Default and cure provisions
• Acceleration rights
• Prepayment provisions
• Subordination or standby provisions when required by another lender
• Cross-default provisions
• Post-closing covenants
• Appropriate closing and transfer documents

Our objective is to make the parties' financial obligations clear before the transaction closes and to reduce uncertainty concerning what happens if payments are late, the buyer defaults, or another post-closing dispute occurs.

Combining SBA Financing and Seller Financing

Some business acquisitions may involve both lender financing and seller financing. In these transactions, the buyer may obtain an SBA-backed loan for a portion of the acquisition while the seller agrees to finance another portion of the purchase price.

These transactions require careful coordination because seller-financing terms may need to comply with applicable lender and SBA requirements. Depending on the financing structure, the seller's note may be subject to particular payment, standby, subordination, or other lender requirements.

C Jackson Law Firm PLLC can assist with the legal aspects of structuring the acquisition while coordinating with the SBA lender regarding financing and closing requirements applicable to the particular transaction.

Protecting Sellers Who Finance a Business Sale

Seller financing can make a business more accessible to potential buyers and may provide sellers with additional flexibility in negotiating the terms of a sale. However, the seller should understand the additional risk involved in accepting payment after transferring ownership or control of the business.

Before agreeing to seller financing, consideration should be given to questions such as:

How much will the buyer pay at closing? What portion of the purchase price will remain outstanding? How long will repayment take? Will the debt be secured? Will there be a personal guaranty? What happens if the buyer stops paying? What happens to the business assets if there is a default? Does a senior lender have priority over the seller?

These issues should be addressed before closing rather than after a payment problem develops.

C Jackson Law Firm PLLC can assist sellers with negotiating and documenting the financing terms and establishing contractual protections appropriate for the transaction.

Selling a Business to an SBA-Financed Buyer

Sellers may encounter additional considerations when a buyer intends to finance the acquisition through an SBA-backed loan.

The seller may be asked to provide business records and other information during the buyer's and lender's due diligence and underwriting process. The transaction may also involve lender-required closing conditions or requests for seller financing.

C Jackson Law Firm PLLC can represent the seller's interests throughout the transaction while coordinating, as appropriate, with the buyer's counsel, lender, broker, accountants, and other transaction professionals.

Selling a Business in Texas

For many business owners, selling a company represents the culmination of years of hard work, investment, and growth. A carefully structured transaction can help protect the value the owner has created while establishing clear expectations between the buyer and seller.

We assist sellers with preparing for the transaction, negotiating the terms of the sale, responding to due diligence requests, reviewing or preparing purchase agreements, structuring payment arrangements, documenting seller financing, and addressing continuing obligations after closing.

Whether the transaction involves the sale of an entire company, ownership interests, selected business assets, or a particular division or operation, C Jackson Law Firm PLLC can provide legal guidance from the initial negotiations through closing.

Legal Counsel for the Transaction—Not Just the Closing

A business acquisition can begin long before the closing date. Decisions made during the Letter of Intent, due diligence, financing, contract negotiation, and seller-financing stages can significantly affect the parties' rights and obligations after the transaction is completed.

Engaging legal counsel early allows potential issues to be identified while there may still be an opportunity to negotiate appropriate protections.

Buying or Selling a Business in San Antonio?

If you are considering buying or selling a business in San Antonio or elsewhere in Texas, C Jackson Law Firm PLLC can assist with the legal aspects of your transaction.

Whether your transaction involves a cash purchase, SBA loan, seller financing, or a combination of financing sources, our firm can help you understand the transaction, negotiate the legal documents, and move toward closing.

Contact C Jackson Law Firm PLLC to schedule a consultation regarding your proposed business acquisition or sale.

C Jackson Law Firm PLLC

San Antonio, Texas

Business Acquisitions | Business Sales | SBA-Financed Acquisitions | Seller Financing | Asset Purchases | Transactional Business Law

CJLawSA.com

Attorney services are separate from SBA lenders, banks, business brokers, and loan brokers. C Jackson Law Firm PLLC does not guarantee financing, loan approval, or funding. SBA and other financing are subject to lender underwriting, applicable program requirements, and the terms and circumstances of the particular transaction.