First, a note from our President and Founder:

"We are excited to announce that we are now accepting clients in the veterinary industry at Private Practice Transitions! Whether you are looking to prepare your practice for sale, need a business valuation, and/or would like to sell your practice for top dollar, we are here to help. Looking to buy? Good news! We have successfully served as the buy-side representative in countless transactions. Call us today at (253) 509-9224 for more information or to get started."

- Justin Farmer, Esq., CBI

President & Founder of Private Practice Transitions

HOT TOPICS:

State of the Lending Market: Prime Rate Update

Many clients are asking if the Prime Rate, which is currently 8.25%, will impact deals moving forward. The short answer: Yes. Prime is the interest rate used by banks as a basis to set rates for different types of acquisition loans, credit cards, and lines of credit. With most lenders setting a variable interest rate on acquisition loans at Prime +1-2%, we are seeing interest rates at 10% (or more). As such, you should expect cash flow to be impacted post-acquisition. What does this mean for you as you consider buying, or selling, a practice? In short:

1. Cash flow will be impacted.
2. Sellers should expect to carry a larger note.
3. Sellers should expect buyers to request “interest only” payments for the first year.
4. Sellers should expect requests for a “grace period” (i.e. no principal or interest) for a period of time.

All that to say: While interest rates impact deal structure, the demand for a solid business (like yours!) is as strong as ever.

FEATURED BLOG:

SBA New SOP 50 10 7 Changes:

What You Need to Know 

Capital access is one of the most prominent hurdles startups and small enterprises face when running their businesses. The Small Business Administration (SBA) assists small businesses to stay afloat by providing financial counseling, contracting expertise, and business loans. It runs several programs and offers various resources to help these businesses to break even and remain viable. 

In April 2023, the SBA finalized rules to help streamline the eligibility determination of their lending programs and add new fraud review mechanisms on SBA loans. These improvements seek to expand capital access and increase fraud protection for small businesses. 

To learn more about these new SBA rule changes (version SOP 50 10 7) effective August 1, 2023, read our newest blog, SBA New SOP 50 10 7 Changes: What you Need to Know. 

Listing 1222

Since the 1970s, this Washington firm has been providing tax and bookkeeping services to both business and individual clients. The current Owners acquired the Practice in 1991. Today, the Practice’s service by revenue breakdown is 43% Individual and Trust Tax Preparation, 23% Business Tax Preparation, 20% Trail Balance Preparation, 6% Payroll and Excise Tax, 5% Consulting, and Other, and 3% Financial Statement Preparation. Including the Owners, the Practice has five (5) staff members serving its ~328 active clients. In 2022, the Practice brought in $526,005 in gross receipts which was a 17.7% YoY increase. Continued growth in 2023 with gross receipts up 11.1% YoY through April! The Practice’s success can largely be attributed to its established name and loyal clients who have grown to trust the services it provides. The Owners would like to continue working part-time/seasonally for agreed-upon compensation through April 2024 to help ensure client retention under new ownership. 

Listing 1225 - Coming Soon!

Established in 2002, this Washington physical therapy practice has offered quality physical therapy services to numerous clients in King County. In 2022, the Practice had gross revenues of just under $1M. Known for its great reputation, loyal client base, and high rate of word-of-mouth referrals, it is no wonder the Practice has an impressive client count. As of May 2023, the Practice has ~3,616 active clients, with a total of almost 10,000 clients in the Practice’s database. The Practice currently employs fourteen (14) individuals including the Owner who is willing to provide transition assistance and help with goodwill transfer, business development, and other “mentoring” functions for an agreed-upon period.

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