"I don't play double games." But a little competition never hurt

It's late April, and I get a call from someone who wants to talk about buying a daycare in Garland, Texas. Nothing unusual there, daycares are solid businesses if you get the right one. But this conversation was different from the start.

Subhas and his wife Elsie had found Lake Cities Montessori, an established operation that had been around for nearly twenty years. The numbers looked strong, the location was solid with new apartments going up nearby, and they were serious about making this work. The seller was an elderly gentleman ready to move on, his kids weren't interested in taking over, and the timing lined up perfectly with the start of a new academic year.

But here's what caught my attention on that first call: Subhas wasn't just looking for money. He was methodically working through every detail. What does the seller actually do? How many hours? What happens to the staff after the sale? Who handles licensing? Can his wife get certified as director? He was thinking three steps ahead, which told me he was the right kind of buyer.

"I already started working on that," he said when I brought up the director certification. "It's not a very complicated licensing process. We should be able to go through that."

The guy had done his homework.

The June 1st Clock

Here's where things got interesting. We were racing against an SBA rule change coming June 1st. Under the old rules, we could use seller financing with a two-year standby as part of the equity injection. After June 1st? Full term standby which basically was going to be an automatic twenty-five years of no payments to the seller.

Subhas understood the implications immediately. We talked through different strategies: maybe increase the purchase price slightly to offer a premium, and have the seller hold a note structured to meet SBA requirements. These are the kinds of creative solutions you need when regulations change mid-deal.

"I like your idea," he said. "You know, we can bring it down and then come to an understanding by five years, try to pay it all off"

But the real test of character came in mid-May.

The Transparency Test

I sent Subhas my proposal. Prime plus 2.5%, minimum down payment, all the pieces we'd discussed. Then he went quiet for a bit.

When he called back that evening, he was direct: "I want to handle the business plan and documentation myself. I don't need the extra consulting services."

A lot of clients would have just ghosted me at that point. Moved on to another lender, never said a word. But Subhas? He called me specifically to tell me the truth. Our consulting services are more in depth on the M&A side and are 100% optional. Pay for them if you want, otherwise we're here to match you with our partners and still assist where needed.

"I want to be very upfront," he explained. "Will that in any way affect my loan?"

I told him no, it wouldn't affect anything. I'd still be involved as his point person with the lender, and I still get paid by the bank for bringing them the deal. We could absolutely move forward.

But then he kept going: "I don't want because I had approached another person. So I wanted to be transparent and tell you that. You are the first person that I reached out to, and you have been way above and beyond, and you've been good. So there's no reason for me to just walk away. But I did not want to do this behind your back and then don't tell you anything."

That hit different.

"I really do appreciate that," I told him. And I meant it. "We have a lot of clients who say they're happy to move forward, I get them approved with the bank, and then they just disappear. They went and got their loan somewhere else."

"I don't play double games," Subhas said simply. "I've told you that very clearly several times."

The next morning, I called him back with Prime plus 2% from a lender that does a lot of Texas deals. He needed to see it match or beat his other offer, and I wanted to earn his business the right way.

"If they can bring it down slightly less than 2, I feel justified in my actions," he said.

When we're trying to put together a strong structure, it's rare that we can also get super competitive on the interest rates. But in this case, we made it happen.

We moved forward together. Subhas was adamant he wanted to handle things with the bank directly from here on out, and we let him. Checking in from time to time.

The Real Work Begins

May turned into June, and we were heading toward closing. Subhas and Elsie were getting everything lined up - forming their LLCs (one for the real estate, one for the business), working on licensing, planning the transition, etc.

Then the classic loan processing issues started piling up.

There was extra land adjacent to the daycare property. We'd talked about it back in April and Subhas wanted it for future expansion, maybe a playground or additional parking. Makes perfect sense. We just needed to be sure it wasn't "excess land" which isn't allowed by SBA. Unfortunately, this piece of land actually ended up not being directly adjacent per the survey, so we had to remove it from the SBA loan.

"I told them the biggest concern was I did not want this to fall into someone else's hand and then become a problem for me," Subhas explained when we talked in late June.

Then the appraisal got weird. The bank ordered it, but communication broke down. A week went by with no movement. So Subhas did what Subhas does and he found the appraiser's number himself, coordinated the whole thing, made sure it got done.

"I'm the guy who coordinated, got the appraisal done, and he's got the appraisal. He's waiting for you guys to move forward," he told the bank team.

Even after the appraisal was complete, it sat in limbo for weeks.

"One person does not talk to another. Another does not talk to the first," Subhas said, a bit of frustration finally creeping into his usually measured tone. This is where having a guide matters. So, I got looped in, got on emails, helped push things forward. But honestly? Subhas was already handling most of it himself.

"Staying on top of things"

When I checked in with him in June, Subhas shared his philosophy: "In a process like this, staying on top of things and making sure that it clicks like a clock where everyone's doing their part as soon as possible - is so very important."

He wasn't wrong. This is a former track and field athlete who represented India internationally. He understood discipline, timing, and the importance of every person doing their job at the right moment.

But he also understood people. The loan officer had given Subhas his cell number and told him to text anytime. "That's not a normal thing," Subhas noted. "And if you text him, believe me, he will respond."

Throughout the summer, Subhas kept me updated. He had to travel back to India in August for family obligations, but he stayed on top of everything remotely. The seller note got negotiated and finalized. The extra land parcel got resolved. Insurance, entity formation, all the closing checklist items were slowly getting checked off.

There were a handful of items that slowed this process down, but all-in-all the both buyer and seller were ready to work together that made all the difference.

October Surprise

Then we hit October, and the underwriter spotted something in the seller's August P&L. The expenses didn't add up. Like, literally - the line items totaled one number, but the expense total showed something completely different.

"Is this an addition error in the total expense figure and subsequent net income, or is this list missing additional expenses not itemized here?" the underwriter wrote.

This is the kind of thing that can derail a deal right before closing. If the financials don't match what the seller reported to the IRS, we've got problems.

The business broker reached out to the seller's CPA. "You are correct. There are expenses missing. The seller has a call into his CPA. We should have the updated financials to you soon."

The underwriter wasn't satisfied: "If the August bottom line figure ends up being correct, I'll need to know why the profitability has dropped about 16% since May also."

For a couple of days, I held my breath. But then the corrected financials came through. Everything matched. The seller and CPA confirmed they were on target or above last year's numbers.

"This looks much better, thank you for taking another look and getting this fixed," the underwriter replied.

Crisis averted.

The Home Stretch

There were more hurdles. But through it all, Subhas and Elsie stayed focused on the goal. After an already succesful career Subhas was taking on significant debt, and his son had even questioned whether it was the right move. But this wasn't just about business for them.

"I'm also looking at it as an opportunity where, you know, you can do something that you're passionate about and without being stressed about other forces that work in work life," Subhas told me. "You are an independent unit, and you're doing what you feel like. Whether until I'm 80 or 85 or 90, if I'm able to get up and walk to still run the school well."

As an educator and someone who'd spent his career teaching and shaping young minds, owning Lake Cities Montessori meant something deeper. He talked about starting a climbing club to teach kids focus and teamwork. About exposing children to real learning experiences. About the importance of physical activity and community.

This wasn't a flip. This was a calling.

Closing Day

At one point in time the lender who'd been talking to Subhas originally made one last push. Matched the rate, found a workaround on the property issue, and tried to win the business back.

"I finally told him, we have moved on way beyond this," Subhas said. "I thank you for following through. I can understand in this business, how difficult it is getting business and keeping up with it."

Even to a competitor he wasn't working with, Subhas showed respect and integrity.

By early October, we were getting the final pieces in place. The loan closed, and Subhas and Elsie took ownership of Lake Cities Montessori.

Looking back at my notes and email threads, what strikes me isn't just that we got the deal done. It's how we got it done.

Subhas could have ghosted me when he thougtht the consulting fee was mandatory. He could have gone with the cheaper local lender who changed his terms at the last minute. He could have given up when the appraisal got stuck in limbo or when the financials didn't match or when any of the other dozen obstacles popped up.

But he didn't. Because at the core of this deal was something you can't manufacture: trust built on transparency.

"I don't play double games," he told me early on. And he never did.

That's the kind of client you want to work for. And that's exactly the kind of business owner the families at Lake Cities Montessori deserve.

Welcome to business ownership, Subhas and Elsie. Lake Cities Montessori is lucky to have you both.

Looking to acquire a daycare or educational business with an SBA loan? The process isn't always smooth, but with the right preparation and partnership, it's absolutely doable. Even with just 5% down. Reach out and let's talk about your situation.

‍