Loan Story

I'll make it happen..


Trade Businesses


Forrest Sewer Pump Services

"Yeah.. I won't ever hear from him again." I thought to myself as I got off the phone call. I casually moved the file into the maybe pile, and didn't think twice about following up.

Derrick called me up in April of this year, like many of our clients, with a dream he had of purchasing a business. He just didn't think there was any way someone would loan him the money. There wasn't any doubt coming from his side of the phone in terms of being able to operate the business, he had just sold himself short on being able to afford it. He didn't need a road map, he didn't care. Derrick needed someone to take him from start to finish, and tell him what to do next. In his mind he already owned the company, but he needed someone to help make it official.

Derrick had worked for Forrest Sewer Pump Services since the mid 2000's, starting under the prior owner and putting in the hours day in and day out. He knew the business like the back of his hand, and when the founder became ill several years ago, Derrick stepped up to the plate. He started running crews and scheduling clients, truly going to work every day as if it was his company. A few years ago the founder unfortunately passed away, and his wife assumed the role of owner. Derrick and her worked side by side for years hoping to one day be able to sell the company to Derrick.

Honestly, it's the perfect set up for a business acquisition deal under the SBA 7(a) program. The problem? Derrick didn't have the down payment required to make the deal work. There were a few creative ideas and structures we came up with, but ultimately they all required a little more time. He essentially needed a MINIMUM of half a year salary to put towards the project, or so we thought.

He told me repeatedly not to worry about it. He'd save. He'd stash. He'd sell his vehicles. He'd make it happen. I wanted to believe him on this, but I've heard that story one too many times to expect it to happen. After we got off the phone he sent me a picture of one of his Harley Davidson motorcycles, a way to show me he was serious about selling everything he had to raise the capital. I remember even bringing up the idea of investors to which he quickly shot me down. This was his baby, and he was going to make it happen.

A month later I get a call. "I have the money, are you sure this will work" - He shoots me a screenshot and I'm wildly impressed, he wasn't joking.

We start drafting up an LOI to send to the seller thinking we're perfectly in the clear. Unfortunately, she was completely unwilling to work with us on seller financing like she had previously stated was fine. I had calls with the seller and the seller's accountant on several occasions, trying to help make the math work for them, there was just no negotiating this time. Derrick was already running the business for her, why would she concede on any of the negotiations? Sure, Derrick could have split off and started his own company, but he was far to loyal to the late Mr. Forrest to even dream of doing that.

Back to the waiting room. Without the seller note, Derrick's required injection was now going to double (still just 10% of project costs, but when you're starting from the bottom.. that's a chunk).

August 22 he sent me a screenshot of his savings account.. "We can do this now?" 3 vehicles sold and countless paychecks stashed away, we were ready to do this. I laughed to myself for a brief moment before happy tears started to roll.

Then, we got to work doing what we do. We had some pushback from a couple lenders as there would be essentially no "post closing liquidity", but fortunately we have partners that don't mind baking that into the deal as working capital, especially on a deal as strong as this otherwise. The approval process through closing was relatively straightforward.

One major difference in Derrick and some of my other clients, is he didn't have any of the blind trust I've grown accustom to in a lot of my deals. He needed constant reassurance along the way that no one was going to back out on him. Weekly, sometimes daily, asking if we were still on track. If he took care of his side, he needed sbaloansHQ to take care of our side. And sbaloansHQ? We were going to make sure everyone else was taking care of their side.  

As of today, Derrick will be able to increase his personal salary (new Harley!?), give his office manager a raise, and continue pouring his sweat and blood into a business he loves so much.