5/28/25 Business Loans Decoded: Fixed Rates, Appraisals, and Negotiable Notes Explained

The Moneywise Radio Show and Podcast Wednesday, May 28th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Manageme instagram: MoneywiseWealthManagement

• 0:00Speaker 00

  From the Garo Ellis padded radio room off Stockdale Highway, here is Money Wise. Call or text into the show 24/7 at 396-1000.

• 0:39Speaker 00

  Here is Money Wise.

• 0:41Speaker 01

  Money, money, money, money.

• 0:46Speaker 02

  I miss that guy.

• 0:47Speaker 01

  The laugh always gets me. Always gets me. Welcome to the Money Wise Show. We are live from the Garo Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 AM, 101.1 FM, and always streaming at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. That's 661-396-1000. Today, we are your hosts, Sammy Abiyawie.

• 1:13Speaker 02

  And LaTroy Dinkins. What's going on, man?

• 1:15Speaker 01

  Not Tyrone.

• 1:20Speaker 01

  I've been saving this one for this show. We haven't been on the show together for quite some time.

• 1:25Speaker 02

  I've been saving this one too, Osama.

• 1:29Speaker 01

  I was driving and I'm like, I'm gonna throw this one out there.

• 1:32Speaker 02

  Yeah, yes, sir.

• 1:34Speaker 01

  Shout out to Tom Maxwell that called you that.

• 1:36Speaker 02

  Yeah, he called me Tyson.

• 1:37Speaker 01

  He called you Tyson?

• 1:38Speaker 02

  It was not Tyrone, he called me Tyson.

• 1:40Speaker 01

  And he apologized and took you to lunch afterwards?

• 1:41Speaker 02

  Yeah.

• 1:42Speaker 01

  Good, good for him. Good for him. Well, we've got a, we've got a good show ahead, LaTroy and I. Before we get started, we have a couple of questions, Troy.

• 1:50Speaker 02

  Yeah, what are those questions?

• 1:53Speaker 01

  First one, "Thank you for discussing the list that the local news mentioned us as the top city people are moving out of, out from. It doesn't feel true as we continue to grow. My question is regarding home loans, and with more homes being built, would it be smarter to hold off on buying a new home till there is more available in the market? Sounds right, but I may be way off as I haven't bought anything in two decades."

• 2:20Speaker 02

  I say one thing, I'll tell you what, when the home starts to develop, there's gonna be a lot of people moving out of Bakersfield, going down there.

• 2:27Speaker 01

  Well, that's, that's, that's a very good point. Now, the, the question is, hey, should I buy or should I hold off? And it's a very, very good question because people might be looking at the market from multiple ways. Now, here's my, my first advice. If you're financially ready, your cash flow can sustain it. And you have a down payment and you know that that payment is that you're going to be making on a monthly basis for the next fifteen, twenty or thirty years, depending on the mortgage you pick. Go for it.

• 2:59Speaker 02

  Yeah.

• 2:59Speaker 01

  The time is right for you if you're financially ready. Okay, don't try to time the market because there was, there will always be variables.

• 3:07Speaker 02

  Yeah.

• 3:07Speaker 01

  Would that be the interest rate? Would that be the inventory? Would that be just the high demand that we're experiencing here in Bakersfield? Now, we're in a unique island because we have a lot of people coming in from San Diego, from San Francisco, from LA, even from out of state because of the cheap housing compared to the rest of the nation.

• 3:27Speaker 02

  And nice housing too.

• 3:28Speaker 01

  Yes. Now, in numbers, our inventory levels have increased thirty point six percent year over year as of April twenty twenty five. That tells you there's a little bit more inventory on the market. It's not translating in lower prices though. Our median price has increased in the last five years. Now, what I have seen in the last six months is the price appreciation has not continued aggressively as, as it had

• 3:54Speaker 02

  Yeah.

• 3:54Speaker 01

  in the last maybe three, four years.

• 3:58Speaker 02

  Yeah.

• 3:59Speaker 01

  It's kind of like stabilizing. That's what I'm seeing.

• 4:01Speaker 02

  Yes.

• 4:02Speaker 01

  So, what that tells me is we're maybe reaching that level where the prices are going to stabilize, right? So, if, again, if you have down payment, your financials allow you to have a mortgage

• 4:16Speaker 02

  Yeah.

• 4:17Speaker 01

  where you're easily can sustain the payment, then go for it.

• 4:21Speaker 02

  Yeah. Some people out there in Sacramento probably own homes for what, like seven hundred, eight hundred thousand?

• 4:28Speaker 01

  Mm hmm.

• 4:29Speaker 02

  And they could get just that, they could get a bigger home, maybe, you know, especially down south like in Long Beach, you know, Inglewood, all that, that area down there. People own homes that are very small, like shacks.

• 4:41Speaker 01

  Yes.

• 4:42Speaker 02

  That are valued at around eight hundred thousand. Like, some of them are valued at a million dollars.

• 4:45Speaker 01

  That's right.

• 4:45Speaker 02

  Why not get the bang for your buck, you know?

• 4:47Speaker 01

  Yes, get out of there.

• 4:48Speaker 02

  Have that positive cash flow, sell that home. A lot, a lot of people have been passed down properties out there because grandma passing on to the grandkids or whoever. Sell that home, get you something bigger and have more cash in the bank.

• 5:02Speaker 01

  Yeah.

• 5:02Speaker 02

  Put, put a down payment.

• 5:04Speaker 01

  Or you can come and talk to a financial advisor to see what you can do.

• 5:07Speaker 02

  Yeah.

• 5:07Speaker 01

  To help that cash keep appreciating.

• 5:09Speaker 02

  Keep appreciating, exactly.

• 5:10Speaker 01

  Right? So, so, so, so to me, there's, there's all, there's not always, we're not going to see the levels of two thousand eight to two thousand fifteen type of prices, I don't think. However, I think inventories are stabilizing now. If there is a rate cut in the next Fed meeting, then that'll be the ideal situation for a person to, to buy a house because at that point, the price has stabilized. The rates came down, so that's a lot more affordable. With that comes a high more demand too.

• 5:45Speaker 02

  Yeah.

• 5:45Speaker 01

  Right? So the people that are not in the market for a house today, when those two elements collide.

• 5:50Speaker 02

  Yeah.

• 5:51Speaker 01

  We're going to have a lot more.

• 5:52Speaker 02

  Absolutely.

• 5:52Speaker 01

  People shopping. So, so, great question, keep them, keep them coming. I, I, I would say it's truly depending on your cash flow, your financial situation. And if you have a down payment, that can sustain a payment that's acceptable to you on your financial situation.

• 6:09Speaker 02

  Yeah, most people keep concerned when it comes to like just the housing market is interest rates.

• 6:14Speaker 01

  It, and it's not just the interest rate, right?

• 6:17Speaker 02

  Yeah, it's not, but that's what people, that's the first thing people anchor to is, oh, where's the interest rate?

• 6:22Speaker 01

  That's what the media is talking about. Media is high, high, we have high interest rate, high interest rate, high. Look, historically, people bought houses in the eighties at twenty plus percent.

• 6:31Speaker 02

  Yeah.

• 6:32Speaker 01

  Interest rate.

• 6:33Speaker 02

  Your houses are worth, what, eighty thousand?

• 6:35Speaker 01

  Well, yeah, but twenty percent.

• 6:37Speaker 02

  Yeah.

• 6:38Speaker 01

  Right? So, I mean, with the cost of material today and, and, and what, I think it warrants the prices we have in the houses.

• 6:45Speaker 02

  Yeah.

• 6:45Speaker 01

  I think, plus, we're running out of land. I mean, not here in Bakersfield, we still have a bunch of land, but other areas, we're running out of land, right? So. If you're gonna wait for that ideal, ideal situation, ideal situation is really what your financial situation dictates. That's what the ideal situation is, in my opinion.

• 7:05Speaker 02

  Yeah, I agree with that.

• 7:07Speaker 01

  Well, what's, what's, uh, let's move on. The markets, yeah.

• 7:10Speaker 02

  Markets are red today, okay. But we, we still can't discount the fact that, you know, from beginning of April, right, we shot up one, two, three, four, five, six, seven, eight, eight day, eight weeks straight been on a trend. And it's funny, looking at this, right? It kind of reminds me of that COVID pandemic that we had. We had that V shape, you know, bottom where things went down sharply and then came back up sharply. And it continued to have that bull run. So I'm hoping for that, you know, for that phenomenon to take place here. But it almost reminds me just like COVID, like it's, it's so crazy. Uh, but.

• 7:49Speaker 01

  So what's, what's the common denominator there?

• 7:51Speaker 02

  That you, are you talking about like the catalyst of what was moving these markets? Or?

• 7:55Speaker 01

  Yeah, I mean, we had something, I mean, if it's a V shape, and as you said, COVID, to me, COVID, uh, time, we had the same president in the office.

• 8:03Speaker 02

  Yeah, a lot of prosperity.

• 8:05Speaker 01

  Yeah.

• 8:06Speaker 02

  Yeah.

• 8:06Speaker 01

  Yeah.

• 8:07Speaker 02

  Uh, but yes, and like you said, Trump was in office during COVID, right? Yeah, that's right. Yeah, 2020. Yeah. Um, so yeah, where it's the same thing that's going on that's taking place. And that's the common denominator you just mentioned there, Trump, right? But not saying that he controls the market, right? We know, we all know that, we know that.

• 8:23Speaker 01

  But the V or the bottom happened because of the tariffs. If my memory is correct, about month and a half ago, we had liberation day.

• 8:30Speaker 02

  It was speculation of these tariffs that moved the market down. People were like, okay, let me try to outsmart this market. Let's move money elsewhere. The market went down. Now the market's starting to pick up. Once, once that conversation started to kind of taper off a little bit, it started to like turn, nothing's positive about it, but start, started to turn positive. But now, what's more interesting now is that we're seeing, uh, recently, some recent developments here. Uh, President Trump, you know, he.

• 9:00Speaker 02

  There's semi, he's putting a halt to semiconductor cells. Which China is like our number one consumer of our chips, basically. So we have at least seventeen semiconductor companies that are in SP500. Nvidia, which is one of the biggest companies, you know, they had that big move like two years straight. We got another one, Advanced Micro Devices, you know, this is a big catalyst right here. So he's saying that, you know, he's telling companies like Synopsys, Cadence, Simons to stop manufacturing chips for China. So this is news that just came out today. Let's just see what happens from here, you know.

• 9:43Speaker 01

  Yeah, that's probably gonna affect the markets.

• 9:47Speaker 02

  Yeah.

• 9:47Speaker 01

  Right, and we know that, and we just have to wait and see.

• 9:52Speaker 02

  Yeah.

• 9:52Speaker 01

  Like the Federal Reserve is doing, it's wait and see.

• 9:54Speaker 02

  Yep.

• 9:55Speaker 01

  That's what, uh, before we go on our break, this just, just quickly, the fact of the Federal Reserve decision to hold the rates stable in their last meeting. I still, I still agree with the policy of wait and see, in my opinion, because our job market or our unemployment rate is at the 4.2%. Our inflation is not where it's supposed to be in the twos. So I'm still supportive of the idea of wait and see and see what, but definitely looking forward to potential rate cut in the next meeting.

• 10:31Speaker 02

  Yeah, when is that next meeting?

• 10:34Speaker 01

  I believe it's September.

• 10:35Speaker 02

  Yeah.

• 10:36Speaker 01

  So stay tuned for that. I think eventually it's, we're gonna, I'm gonna say high potential of a rate cut.

• 10:47Speaker 02

  Yeah.

• 10:47Speaker 01

  Which, according to Trump, will give us like a fuel jet to the economy.

• 10:52Speaker 02

  Yeah, that will, that will.

• 10:54Speaker 01

  From a real estate development standpoint, lines of credit, operating lines of credit for small businesses especially, which are the

• 11:03Speaker 01

  Um, largest employer in the nation.

• 11:06Speaker 02

  Yeah.

• 11:06Speaker 01

  When, when their cost of borrowing goes down, then they can spend more money on capital expenditures, on, on, on, on new jobs, on opening new employees. So I'm looking forward to that meeting and see the impact that's gonna have.

• 11:19Speaker 02

  Yeah, and those metrics, those metrics that you're mentioning right now have, has been overshadowed because from a number standpoint, on paper, everything looks healthy, but everything's been overshadowed by the tariffs.

• 11:31Speaker 01

  Yes, and there's still a lot of unknowns.

• 11:33Speaker 02

  Yeah, I know, yes.

• 11:34Speaker 01

  So I mean, we had, we had that moratorium.

• 11:36Speaker 02

  We had the semiconductor news today, too, so.

• 11:37Speaker 01

  Correct, we had that moratorium put by, by, by the, the government between the trade talks between the United States and China, up until maybe they said ninety days, ninety days, that started like three weeks ago.

• 11:49Speaker 02

  Yeah.

• 11:50Speaker 01

  So we'll see, they're still negotiating.

• 11:51Speaker 02

  Yeah.

• 11:52Speaker 01

  And hopefully something good comes out of that.

• 11:55Speaker 02

  Yeah, only price will tell.

• 11:57Speaker 01

  That's right. Um, anything else before we go on break?

• 12:01Speaker 02

  Uh, all is good, all is good here, we'll, we'll take our first break and then we'll get back.

• 12:04Speaker 00

  Are you nearing retirement and currently working with a financial advisor? Are you not sure if you're invested appropriately? Call our offices at six six one eight four seven one thousand to sit down with a Money Wise financial advisor for a no obligation assessment.

• 12:25Speaker 02

  Yeah, I ain't slipping up.

• 12:32Speaker 01

  We're back. I'm Sammy Aviyawi here with LaTroy.

• 12:36Speaker 02

  That's right.

• 12:37Speaker 01

  And our, the next segment, LaTroy, I wanted to talk a little bit about small business. You know, I have this experience, twenty plus years of experience in dealing with small businesses from a banking standpoint. I had my own consulting business before I joined Money Wise. And I always face these questions from small businesses and I wanted to just today, since it's you and I.

• 12:57Speaker 02

  Yeah.

• 12:57Speaker 01

  Talk about some of them, maybe ask some questions, have some answers and just give a little bit of guidance.

• 13:02Speaker 02

  Yeah, I think this is good because we, you know, we have business owners here as clients and I think this would be very educational for them because they always kind of call in with questions.

• 13:12Speaker 01

  Yeah, so.

• 13:12Speaker 02

  Definitely.

• 13:13Speaker 01

  A lot, a lot of the times, a lot of the business owners, especially when they reach retirement age and they've worked all their lives, and sometimes the husband and wife both.

• 13:22Speaker 02

  Yeah.

• 13:23Speaker 01

  On this business. And then now they wanna exit and they don't know how.

• 13:27Speaker 02

  Yeah. Wha- wha- what are some, my question is, the valuation of a business, right?

• 13:33Speaker 01

  Mm-hmm.

• 13:34Speaker 02

  How is that, how is that dictated? How, wha- how do you evaluate a business, a small business?

• 13:40Speaker 01

  And, and a very good question. And the first step for me, I mean, as a small, if I am a small business owner and I'm trying to exit, first, I wanna put my financials in order.

• 13:49Speaker 02

  Okay.

• 13:49Speaker 01

  Meaning, I wanna have good books.

• 13:51Speaker 02

  Yeah.

• 13:52Speaker 01

  And if I have not been balancing my books, this is the time for me to start balancing them.

• 13:56Speaker 02

  Okay.

• 13:56Speaker 01

  Right? So have a very good bookkeeper or even a CPA, come in and take a look at the books, make sure that those numbers are balanced, especially when it comes to the balance sheet, things are categorized correctly. And then, your profit and loss statements, are you capitalizing things? Are you expensing them and taking advantage of the depreciation? All those are questions you wanna talk about with your bookkeeper or CPA in order for you to have clean set of books.

• 14:25Speaker 02

  So what constitutes a clean book? Uh, you know, is it the bills like being paid up to date or what, what constitutes?

• 14:31Speaker 01

  No, it's categorizing the, the, the expenses and, and, and the line items in their specific, uh, lines.

• 14:39Speaker 02

  Gotcha.

• 14:40Speaker 01

  Okay, so for instance, an account receivable is an asset.

• 14:44Speaker 02

  Yep.

• 14:44Speaker 01

  Right? It cannot be a negative number carried on the balance sheet.

• 14:49Speaker 02

  Gotcha.

• 14:50Speaker 01

  Okay, so that's what a lot of small business owners do. So they don't pay attention to their bookkeeping. They only go see their CPA or their bookkeeper at the end of the year.

• 14:59Speaker 02

  Yeah.

• 14:59Speaker 01

  Right? And they have no idea about what's going on in the business throughout the 12 months. Right? So if you're gearing up to sell, you definitely wanna have that balance sheet to reflect in exactly what's going on. Your cash, account receivables, inventory on the current assets, then you move into your, uh, uh, fixed assets, is that buildings, vehicles, whatever, and then you go to the liability side. And again, they need to reflect exactly what. So your capital injection, any shareholder notes, uh, any long-term and short-term liabilities, would that be line of credit or real estate loans, things need to be in the right place.

• 15:38Speaker 02

  So you gotta dress up everything, essentially. You hire somebody to come in and say, hey, is all this, is all this clean? So that way you could essentially present it to the person who's gonna be.

• 15:48Speaker 01

  Yes, so, so you're next, that's your, that's step number one. So step number one, a clean set of books.

• 15:53Speaker 02

  Okay.

• 15:53Speaker 01

  Right? Step number two, go and talk to an evaluator.

• 15:57Speaker 02

  Okay.

• 15:58Speaker 01

  Business evaluation services, and we have some here in town that you could call and they can come in and give you an idea about what your business is valued at.

• 16:08Speaker 02

  Okay.

• 16:08Speaker 01

  Okay, that's a third party that's got no emotional attachment to your business. They're gonna look at your books, they're gonna look at your operation, they're gonna evaluate it, and they're gonna give you a number. That number a lot of the time is based on a multiplier. That multiplier is different from one industry to another.

• 16:26Speaker 02

  Okay.

• 16:26Speaker 01

  Right? So, a business appraisal or business appraiser have, they have the experience to come in and look at all of these things and come up with a final number for your, for you. Then you decide, okay? Now, now you have that number, what are you gonna do with it? Right? That's where the rubber meets the road.

• 16:47Speaker 02

  Gotcha.

• 16:48Speaker 01

  A lot of the time, business owners, they wanna, should I talk to a broker? Do I have this long-term employee? That's been with me for the last twenty years, and maybe they can carry the torch, maybe I can help them, I can stay involved in the business, but not running the day-to-day operation.

• 17:03Speaker 02

  Yeah.

• 17:03Speaker 01

  Those are all questions the business owner needs to answer before they make any step. And for me, the major thing too is you've got to have a financial advisor or some type of a consultant involved, so they can help you from a tax planning standpoint. What are you gonna do? Right? Now, there's multiple things. You have the business value that you cannot 1031 exchange that, because it's, it's a non-tangible.

• 17:27Speaker 02

  Yeah, it's not tangible, it's not like a building or anything.

• 17:29Speaker 01

  Correct, but if you have a building, then you have avenues there, so you can manage your tax liability through a 1031 exchange, through a DST, so you can engage and, and, and put that money to work for you, even in retirement.

• 17:43Speaker 02

  Gotcha.

• 17:44Speaker 01

  Right?

• 17:44Speaker 02

  Yeah.

• 17:45Speaker 01

  So, there's, there's multiple things for the business owners to think about, but step number one, get your financials ready.

• 17:52Speaker 02

  Yes.

• 17:52Speaker 01

  And that's what a lot of, in my banking career, that's what I faced. A lot of people wanna be aggressive in their tax management. Of the bottom line, guess what? When you wanna exit and now your value is based on that EBITDA multiplier. Then then your business might not be valued as to what you think.

• 18:13Speaker 02

  Yeah.

• 18:14Speaker 01

  Or what you feel, or what it might be even the true value of that business.

• 18:18Speaker 02

  So EBITDA, earnings before income, tax and appreciation, right?

• 18:22Speaker 01

  Yes.

• 18:23Speaker 02

  So it's based off a multiplier and you said it's based off the industry that you're in.

• 18:26Speaker 01

  Yes.

• 18:27Speaker 02

  So let's just say that you own a cleaner business, like you clean, you clean. Uh, clothes and and you, you know, people bring like today's cleaner in town, like.

• 18:37Speaker 01

  Okay.

• 18:37Speaker 02

  Cleaner business, something like that.

• 18:39Speaker 01

  Uh huh.

• 18:39Speaker 02

  Is what you're selling within that business, if it's a viable enough business, not kinda like a business where you are. Using the banks, leveraging the banks money, you know, giving people loans and stuff like that to purchase cars and things of that nature, but it's just something viable. People bring in. Clothes they pay for right through hard cash. How are those businesses like valued at?

• 18:59Speaker 01

  Same thing. I mean through.

• 19:01Speaker 02

  Like as far as a multiplier.

• 19:03Speaker 01

  Yeah, the multiplier, well, the multiplier is a range between one and half earnings to sometimes six and half, really depending on the industry. I really don't know exactly what. A cleaner would be at, but somewhere in that in that range.

• 19:14Speaker 02

  Gotcha.

• 19:15Speaker 01

  Right? So the the other thing too, a cleaner, they will have some type of a real estate.

• 19:22Speaker 02

  Attachment?

• 19:23Speaker 01

  Attachment to it if they're leasing or not leasing. So as you're selling the business, the buyer is gonna be looking at all of this. If you're. If you're owning the real estate, one of the avenues for you is maybe keep the real estate and lease it back to whomever is buying your business. That's a source of income for you.

• 19:38Speaker 02

  Yes.

• 19:39Speaker 01

  And now you don't have to sell the real estate and pay capital gains when you're and and don't have a step up.

• 19:46Speaker 02

  Yeah.

• 19:46Speaker 01

  Right?

• 19:47Speaker 02

  Yep.

• 19:47Speaker 01

  That's one, one, one avenue to.

• 19:49Speaker 02

  To maximize.

• 19:50Speaker 01

  To maximize your retirement.

• 19:53Speaker 02

  Yeah.

• 19:53Speaker 01

  And still being involved in the business and and and taking.

• 19:56Speaker 02

  Cause you own the building essentially, yeah, yeah.

• 19:58Speaker 01

  Right? And then you can either, that's the choices that the business owner needs to make. Are they gonna carry the note?

• 20:03Speaker 02

  Yeah.

• 20:03Speaker 01

  Privately, or they're gonna sell it and then the buyer is gonna have to go and get financing from somewhere else, which we'll discuss in the third segment of the show.

• 20:11Speaker 02

  Yeah.

• 20:11Speaker 01

  What are some of the avenues for buyers?

• 20:13Speaker 02

  Yeah.

• 20:13Speaker 01

  To to to get into a business transaction, but for a business owner to sell a lot of choices.

• 20:21Speaker 02

  Yeah.

• 20:21Speaker 01

  Okay, so you can carry the note, for instance. What are the advantages of carrying the note? Tax for tax purposes, you're not getting a lump sum and you're not paying a lot of capital.

• 20:31Speaker 02

  Capital gains.

• 20:31Speaker 01

  Gains.

• 20:32Speaker 02

  Yeah.

• 20:32Speaker 01

  So you get, you're taking the, the payment on the next, whatever years you decide.

• 20:38Speaker 02

  Yeah.

• 20:38Speaker 01

  Five, seven, 10. Sometimes people carry the note up to 20 years.

• 20:42Speaker 02

  Yeah.

• 20:42Speaker 01

  Right? Because they want to create that income. That's their retirement, basically. You and I have been putting money away in 401K and some other things. They've been putting money in their business and now it's time for them to collect in their retirement.

• 20:53Speaker 02

  So have you ever, like, is it, is it a common thing where like businesses they sell and then, you know, there's a valuation at one, you know, a, a certain price, right? Is it a common thing to kind of get that up, you know, one lump sum or just get payments on that?

• 21:09Speaker 01

  Uh huh. Yeah. Yeah. There's, the, the two options are both available for the, for the seller. They can get the lump sum if the, if the person goes and gets financing from a third party.

• 21:17Speaker 02

  Yeah.

• 21:18Speaker 01

  Whatever that is. Could be a bank. It could be a specialized type of industry lender.

• 21:22Speaker 02

  Yeah.

• 21:22Speaker 01

  Uh, and, and, and then they take the lump sum and they go and they decide what to do with it.

• 21:27Speaker 02

  Yeah.

• 21:27Speaker 01

  Right? Or they take payments.

• 21:29Speaker 02

  Yeah.

• 21:30Speaker 01

  To me, I'll take the payment.

• 21:32Speaker 02

  Yeah.

• 21:32Speaker 01

  Why? Because now I'm still involved in the business.

• 21:36Speaker 02

  Okay.

• 21:37Speaker 01

  If it doesn't work out, I can always come back and I can put a clause into the sales agreement that if it's not running in a certain way, if I'm not getting my payments on time, I can come back and run it again.

• 21:48Speaker 02

  Yeah.

• 21:48Speaker 01

  That's what, and it's happened.

• 21:49Speaker 02

  Yeah.

• 21:50Speaker 01

  It's happened multiple times.

• 21:51Speaker 02

  Cause I can only imagine if somebody's selling a business, their business is valued at, let's just say for a small business, like 20 million dollars or whatnot. Just to get that 20 million dollar check, you know, that's, that's a lot of taxes, ta- ta- a huge tax implication.

• 22:01Speaker 01

  Yes.

• 22:02Speaker 02

  You could just, r- rather than getting that 20 million, you have the option of like, okay, it's worth 20 million, but just pay me in small increments.

• 22:09Speaker 01

  That's right. You're gonna pay, you're gonna carry the note like a bank would.

• 22:12Speaker 02

  Yeah.

• 22:12Speaker 01

  Meaning you're gonna take a small down payment, you know, typically 10 to 20%.

• 22:17Speaker 02

  Yeah.

• 22:18Speaker 01

  Then you're gonna carry the rest over a period of time at a, at a certain interest rate, right? Let's say what in- interest rates today are six and a half.

• 22:26Speaker 02

  Yeah.

• 22:26Speaker 01

  So you're gonna be still making money on your money while you're carrying the note.

• 22:30Speaker 02

  Yeah.

• 22:30Speaker 01

  Right? But you're not getting that lump sum and you're not having a tax.

• 22:35Speaker 02

  Yeah.

• 22:35Speaker 01

  Event all at the same time. I'm not a CPA by the way, so I encourage you, if you're doing any of this, talk to your CPA, talk to your financial advisor before you make any, any decisions. We'll go into the next break. I'm really liking this conversation. When we come back, we'll talk about the buyer's side of things.

• 22:52Speaker 00

  Don't forget, Money Wise is more than a radio show. We're an independently owned, local wealth management firm with 60-plus years of collective experience. Our financial advisors are here to help you, Kern County. Together, let's be smart, be safe, be money wise.

• 23:16Speaker 01

  We're back. Latroy and Sammy.

• 23:19Speaker 02

  That's right.

• 23:20Speaker 01

  Uh, we have a listener question, Latroy.

• 23:22Speaker 02

  Yeah, we do. It says, uh, can you negotiate a promissory note? Is that new? I didn't think they were negotiable. He says, and then he responded back, says, sorry, maybe I wrote it wrong, but what must a promissory note contain to make it negotiable? Thank you, guys. Deep convo.

• 23:39Speaker 01

  Uh, so let's define just a promissory note for our listeners that are not familiar with the, with the term. The, the promissory note is a legal document that outlines the term of a loan or a note between a borrower and a lender. And almost every aspect of a promissory note is negotiable. So if you're dealing with the bank and you have a promissory note, it's going to outline everything, basically the contract between you and what you promised to pay the bank or the lender. Okay. And every aspect of it is negotiable. Okay. So let's start. The loan amount, okay, so sometimes you have a purchase price of a real estate at a million dollars. Okay. And the bank wants 30% down. Well, you can negotiate. You can say, well, no, I only want 20%.

• 24:22Speaker 01

  Or maybe 10%. So you can negotiate that. And the bank at that point can accept the level of risk or say, no, I'm going to stick to 30% down payment. Okay? Second thing is the interest rate, and that's probably the most negotiable thing in the promissory note.

• 24:39Speaker 02

  Really?

• 24:39Speaker 01

  Yes, because people will come in and you have lenders, thousands of lenders, and each one of them will tell you, well, I'm going to give you a prime plus two, if it's a variable type of note, or another lender will tell you, no, it's prime plus one. And somebody was like, you know what? I'm going to take the interest rate risk out of your hand, and I'm going to just give you a fixed interest rate at 5%.

• 25:00Speaker 02

  Yes.

• 25:00Speaker 01

  So yes, you can negotiate the interest rate with your lender. Okay? Granted, you're a good credit risk.

• 25:07Speaker 02

  Yeah.

• 25:08Speaker 01

  Okay, again, going back to your financials are good and clean and you're ready.

• 25:11Speaker 02

  Yeah.

• 25:12Speaker 01

  Not giving them some type of a package that that's all over the place and you're expecting the best terms.

• 25:18Speaker 02

  Yeah.

• 25:18Speaker 01

  Okay, sometimes in order for you to be a good credit risk for a bank, you need to give them the ingredients to make that cake.

• 25:26Speaker 02

  Yeah.

• 25:26Speaker 01

  One of them is clean set of books, okay? The payment terms.

• 25:32Speaker 02

  Yeah.

• 25:33Speaker 01

  Are you monthly, quarterly, six, biannually or annually? We see that a lot in in in ag loans where a lot of the notes are interest only with the principal being paid on either semi-annual or an annual. Why? A lot of people ask why? Well. Based on when, exactly.

• 25:51Speaker 02

  Yeah.

• 25:52Speaker 01

  It's a cyclical type of industry, so whenever the crop is collected and you collect the funds, that's when you you make your principal reduction.

• 25:59Speaker 02

  Yes.

• 25:59Speaker 01

  Right?

• 26:00Speaker 02

  It says, uh, there was another question that came, but go ahead, finish. I think you.

• 26:03Speaker 01

  No, I was just going, I'm gonna go faster through the rest, the collateral.

• 26:06Speaker 02

  Yeah.

• 26:06Speaker 01

  How are you securing that note? I mean, if you have, if you're, if you're a good credit risk, maybe you can get an unsecured note. If you're not, then they're gonna lean on some type of real estate or they call a U C C or Uniform Commercial Code, and they're gonna put a lien on all your vehicles, maybe some pieces of equipment and tenants improvements even.

• 26:27Speaker 02

  Makes them more accountable to give you.

• 26:29Speaker 01

  Yes.

• 26:29Speaker 02

  They need to give you.

• 26:30Speaker 01

  Prepayment penalty. So on commercial loans, especially on term loans, we have prepayment penalties and you can negotiate those.

• 26:36Speaker 02

  So prepayment penalties, that means that if I say, oh, you know what? I got this, I got the total pie right here, I just wanna pay it off.

• 26:44Speaker 01

  That's right.

• 26:44Speaker 02

  You can't pay it off.

• 26:45Speaker 01

  No, no, no. Why? Why?

• 26:47Speaker 02

  Cause they gotta make money too, right?

• 26:49Speaker 01

  That's right, because the bank takes a risk in fixing your interest rate.

• 26:52Speaker 02

  Yeah.

• 26:52Speaker 01

  Right? For a period of time. They write all their balance sheet stuff or whatever around that note.

• 26:58Speaker 02

  Yeah.

• 26:59Speaker 01

  Being fixed for a certain period of time. Now, if they're gonna, if you're gonna pay them off, then they're gonna lose revenue.

• 27:04Speaker 02

  They're gonna lose revenue.

• 27:05Speaker 01

  So for them to protect themselves from that payoff, guess what? They put a prepayment penalty on on the on the note. Default clauses, clauses. Now, if you have partners, sometimes, you know, partner die, that's an event of default.

• 27:18Speaker 02

  Yeah.

• 27:19Speaker 01

  Okay, you move addresses, that's an event of default. So you can negotiate those on your promissory note. A lot of people just signed a promissory note to tell the truth.

• 27:27Speaker 02

  I wonder if underwriters that are people who are actually engaged in in this type of, you know, activity, do they look at each business owner and say, okay, is there any sort of insurable interest amongst business partners? Is there any sort of, um, what they call the cross purchase agreement where if somebody passes away, you could buy their shares with that life insurance? And I wonder if that they use that as like, you know, a stamp of credibility if they got all those ducks in a row as well?

• 27:52Speaker 01

  Yeah, definitely, but but but also, you know, you have two partners, but one partner is stronger financially than the other partner, right? And then the one the the strong financially stronger partner dies and you're left with the weak fight. Then that creates an event of default. Now the bank can renegotiate.

• 28:09Speaker 02

  Oh, and that's in the clause?

• 28:10Speaker 01

  Oh, yes, yes. That's why you need to pay attention to those clause embedded into the promissory note and the commercial loan agreement, both. Commercial guarantee. So every note, a lot of the banks pursue personal guarantees on a commercial credit. Now, let's say you have a corporation that's borrowing the money, the bank is gonna seek personal guarantees.

• 28:29Speaker 02

  Yeah.

• 28:29Speaker 01

  That's the secondary support that the the bank is needing. So you can negotiate, no, I don't want no personal guarantees.

• 28:37Speaker 02

  What are what does personal guarantees entail?

• 28:39Speaker 01

  So I am borrowing to purchase this building, okay, and I'm putting thirty percent down, right? My personal guarantee, the business I'm running out of that just got hit hard by the tariffs and is no longer a valid going concern.

• 28:54Speaker 02

  Yeah.

• 28:54Speaker 01

  So my business is going bankrupt. How am I gonna be, uh, how is the bank gonna be protected through the personal guarantee?

• 29:01Speaker 02

  So it's personal like?

• 29:03Speaker 01

  Now going after me personally to pay the note, not the business.

• 29:06Speaker 02

  Okay. Yeah.

• 29:08Speaker 01

  Right? So they have to have some type of consideration in order for them to get that personal guarantee.

• 29:13Speaker 02

  And that involves like their homes, their properties, their their personal assets.

• 29:16Speaker 01

  Correct, whatever, trusts even, if you have, if you, if you, if you have a trust and any.

• 29:20Speaker 02

  So essentially, they're not just looking at the business itself, they're looking at what you have personally as far as assets.

• 29:25Speaker 01

  That's right. Yeah, that's provides additional support for the loan on the loan request.

• 29:33Speaker 01

  Now, we have, I think we have a follow-up comment from the same listener.

• 29:36Speaker 02

  Yeah.

• 29:36Speaker 00

  He said, "I understand that it's negotiable in the beginning, but the last segment sounded like it can be renegotiated. Thank you, guys. We'll have to listen a bit later while I'm at the gym." New listener, and thank you, guys.

• 29:51Speaker 02

  Good job for going to the gym.

• 29:52Speaker 01

  That's right.

• 29:53Speaker 02

  I need to be there.

• 29:54Speaker 00

  And good job for listening, because I'm over here taking notes.

• 29:56Speaker 01

  So, so, yes. Can you go back to the bank and try to negotiate? Yes. But they don't have to accept.

• 30:04Speaker 02

  Yeah.

• 30:04Speaker 01

  Right. Why? Because you've signed a contract. Right? And that contract could potentially include your personal guarantee.

• 30:12Speaker 02

  Yeah.

• 30:13Speaker 01

  So if you say, "Well, I'm no longer going to be paying this note. I want to renegotiate the rate. I want to renegotiate the repayment. I want my loan extended." Now, the bank can choose to work with you. Right?

• 30:22Speaker 02

  Yeah.

• 30:23Speaker 01

  And for the most part, the banks do not want to take loans back. I can assure you that, because it's just pricey. For a bank to take something back and then negotiate and go through a foreclosure, whatever. Banks don't want to do that. With that being said, banks are not going to lose money. They're going to try. They're running a business, and they want the business to be run profitably, like you and I are running our businesses, right? So, they're going to be open to renegotiating as long as the terms that you're seeking are reasonable. And, and, and I can assure you, especially in this town.

• 30:54Speaker 02

  Yeah.

• 30:55Speaker 01

  A lot of the bankers involved in this town, they're reasonable people, and they'll work with you. We've gone through this in 2008.

• 31:00Speaker 02

  Yeah.

• 31:01Speaker 01

  You know, through their big recession. And we worked with, with, with people. And every bank did. And some banks went defunct because of that.

• 31:11Speaker 01

  So, yes, to answer your question, a promissory note is renegotiable. Granted that the bank is willing to sit across from you and negotiate.

• 31:21Speaker 02

  So, personal guarantees, going back to that. You said that, that, that is something that they put in every contract, or, or it's?

• 31:29Speaker 01

  Um, no, some banks, some banks would, would say, no, we don't need the personal guarantee. But when?

• 31:35Speaker 02

  And also depends on like, you know, just the industry as well too, right?

• 31:39Speaker 01

  Correct, but also when, so every loan is rated for credit risk.

• 31:46Speaker 02

  Yeah.

• 31:46Speaker 01

  Right? So if I'm gonna ask for your personal guarantee or not ask for your personal guarantee, depending on the risk profile of that transaction. For instance, you're buying a million dollar building, but you're only needing to borrow thirty percent of the purchase price. I got plenty of legroom there on the runway as a bank. In case something goes bad, I have seventy percent to play with here.

• 32:07Speaker 02

  Yeah.

• 32:07Speaker 01

  Right? So, you know, you don't want to give me a personal guarantee? That's fine. I got plenty of room. But if you're borrowing seventy, eighty percent.

• 32:16Speaker 02

  Oh yeah, that's bad. Yeah, that's, that's not, yeah. So it's all, it's all depending on your cash flow.

• 32:21Speaker 01

  It, it, well, cash flow is just one.

• 32:23Speaker 02

  Yeah.

• 32:24Speaker 01

  It's, it's a, a whole profile risk that the bank and the rights do.

• 32:29Speaker 02

  Yeah.

• 32:29Speaker 01

  It's, cash flow is one of them. Capital is one of them. The actual management is another. So there's five or six different pieces that the underwriter looks at.

• 32:37Speaker 02

  Gotcha.

• 32:38Speaker 01

  Right? And cash flow historically, to tell the truth, a lot of the bankers, and especially now the new thinking bankers, they will say, that's historical. I want to know, I want to project the future that you have the ability to pay me back on this note that you're borrowing today. So show me some projection and show me how you're gonna do it. Right? So cash flow is just one, capital is another, character. You know, we're gonna, the bank is gonna look at your character. They're gonna do credit reports. They're gonna do business credit reports. They're gonna look at your reputation within the, the, the place of business that you are. So it's, it's, they don't take it lightly because, look, as a bank, they're taking a deposit

• 33:19Speaker 01

  of John Smith and turning that into a loan before they give that loan. They want to make sure, the FDIC is expecting them to make sure that that loan is gonna get repaid. Right? That's why they have to go through all this underwriting process and make sure that the risk profile is adequate and all that.

• 33:37Speaker 02

  Yeah. Interesting.

• 33:39Speaker 01

  Very interesting. We'll be back after this break. If you would like to listen to the show or any of our past programs, subscribe to the Money Wise Podcast, commercial free on all podcast platforms like iTunes, Apple Podcasts, and Spotify. We'll be right back.

• 33:53Speaker 00

  Need to get your financial fix on the go? If so, subscribe to the Money Wise Podcast and catch up on all past shows whenever.

• 34:08Speaker 01

  To the club, hey!

• 34:12Speaker 01

  We're back. We're back. Latroy and Sammy. Latroy, we talked about a bunch of things for, you know, small businesses. We talked about evaluation. We talked about the importance of keeping clean books.

• 34:24Speaker 02

  Yep.

• 34:25Speaker 01

  And why it's important. We talked about promising notes and how you can negotiate that upfront and maybe down the line. Now, let's talk a little bit about a buyer.

• 34:34Speaker 02

  Yeah, let's talk about that. Look, this is my question here, because this hits home right here, this question I have. So if I'm a guy, and I'm like, hey, this person is selling their book of business here, you know, they're a financial advisor, selling their book of business, to, let's say a hundred million dollars assets under management, just to make it easy math, you know, their average fee is about 1%, so they're bringing in a million dollars.

• 34:58Speaker 01

  Correct.

• 34:59Speaker 02

  Of revenue.

• 34:59Speaker 01

  Mm-hmm.

• 35:00Speaker 02

  Okay, so if I'm going to that business and I'm, you know, wanting to get with the banks, obviously, and say, hey, I want to buy this business, help me. What's the steps there?

• 35:10Speaker 01

  Well, I would say the first step for you is to go to that person that's selling the business and see if they want to carry the note.

• 35:16Speaker 02

  Gotcha.

• 35:17Speaker 01

  Okay, that's gonna avoid a lot of the bank headache, which we'll get to in a couple of minutes.

• 35:23Speaker 02

  Okay.

• 35:23Speaker 01

  Now, it's helpful for you, it's helpful for the seller.

• 35:26Speaker 02

  Okay.

• 35:27Speaker 01

  It's helpful for the seller for the reasons we've talked about earlier. It's helpful for you because you don't have to pay bank fees. And maybe, maybe, you can negotiate a much lower interest rate on the note the seller is going to carry. For you.

• 35:40Speaker 02

  Gotcha.

• 35:41Speaker 01

  Right, that's, that's, I always, always would say, whomever is selling a business and if somebody is buying a business, try to get a deal done just between the two of you before you go to banks and things like that. Right? Now, say the seller is like, you know what, I am tired of all this. I want out of the industry. I'm moving out of state. I'm selling everything and leaving the United States and moving to Canada. Okay, that's, what can you do? And I was like, okay, Mr. Seller, I'm gonna go to the bank and I'm gonna try to get me a loan. Now, get me these ingredients. Three years of financial statements, which they need to be clean. They need to be stable. They need to be showing cash flow enough to service the debt that you're borrowing.

• 36:21Speaker 02

  Okay.

• 36:21Speaker 01

  Right?

• 36:22Speaker 02

  So that needs to get an outside vendor to evaluate?

• 36:24Speaker 01

  Correct. So you're gonna take all these financials. You're gonna take all this stuff that he's got and he's been carrying for all these years and you're gonna, you guys are both gonna agree on an appraiser. Now, if you go in seeking a loan from a bank, the bank might dictate who the appraiser is.

• 36:38Speaker 02

  Yeah.

• 36:38Speaker 01

  Right?

• 36:39Speaker 02

  For their safety.

• 36:39Speaker 01

  Correct. So they wanna go to a third party and now the FDIC makes them, there's rules for you to even pick an appraiser.

• 36:45Speaker 02

  Okay.

• 36:46Speaker 01

  It's a, it's, it's, it's a blind kind of like bidding process and you don't even know who you're gonna get until the, the report is completed. The third party comes in, evaluates the business, says, okay, well, this thing is worth a million bucks. The bank now can proceed to the next step. Right? The next step is, we want thirty percent. We want forty percent. Well, we want fifty percent because this industry is kinda like shaky. It's been shaky for the last couple of years. Or they can say, you know what? We'll lend you up to a hundred percent. Granted, you use some type of a guarantee program through the federal government or the state government.

• 37:24Speaker 02

  Wow, okay.

• 37:25Speaker 01

  Okay, so the federal government has an SBA program, Small Business Administration, and the state, like the California state, has a similar program that can help you get into a loan by guarantee the loan on behalf of the bank.

• 37:38Speaker 02

  Okay.

• 37:39Speaker 01

  But you, as Mr. Borrower, you're gonna have to pay for a fee to get, to get that credit guaranteed. That's a steep fee sometimes, especially when it's, if it's an SBA deal. We should get Matt Damien back on the show to talk about these things and get an update on the SOP. Um, but the fee, I mean, the guaranteed portion carries a fee that you have to pay for. But that facilitates the loan for the bank because their risk now got reduced substantially.

• 38:08Speaker 02

  Yeah.

• 38:08Speaker 01

  Right? So they want to lend you the money because their risk is on, not on their balance sheet, but it's on the government's balance sheet. Then they can turn around and even sell that loan in the secondary market and make money.

• 38:20Speaker 02

  Wow, like, yeah, yeah.

• 38:22Speaker 01

  Okay, so all those things are, are, are, can, can happen in the background. You as a borrower, we don't even know. But none of this, your payment is still being made to the bank like you agreed to. Nothing changes for you.

• 38:33Speaker 02

  Yeah. So when they, so, so let's go back. So when, when the bank evaluates the business, bringing in a million dollars worth of revenue, you, you got the multiplier.

• 38:41Speaker 01

  Mm-hmm.

• 38:41Speaker 02

  Uh, they're not giving you, they're not asking for thirty percent, forty percent down on what the revenue, they, they want it like the whole valuation of the business. So if it's valued at, let's say, five times multiplier, they say, okay, you buy this business for the evaluator, uh, the appraisal says you can buy this business for five million dollars.

• 38:57Speaker 01

  Mm-hmm.

• 38:58Speaker 02

  That's what you're asking the bank, you're, the bank will be telling you, hey, you need to put down thirty percent, or you could use the SBA.

• 39:07Speaker 01

  Correct, yes. So, so let, so let's just recap what you said.

• 39:10Speaker 02

  Yeah.

• 39:11Speaker 01

  Million dollar revenue, five dollar, five million dollar evaluation, that's the purchase price.

• 39:16Speaker 02

  Yeah.

• 39:16Speaker 01

  Right? Now you're gonna seek financing for the five million dollars or portion of that, depending on what the bank appetite is.

• 39:23Speaker 02

  Yeah.

• 39:23Speaker 01

  Right? That, is that, is that correct? So now we just have to show the ability of that business, business that you're purchasing to make the, these loan payments.

• 39:33Speaker 02

  Yep, and that's due by.

• 39:35Speaker 01

  The cash flow that you talked about earlier.

• 39:36Speaker 02

  Cash flow and income and all that.

• 39:38Speaker 01

  Correct, correct. And the, and your ability, if, if I'm, if I'm the lender, I'm gonna have to look at your ability to actually run this business successfully and make money so you can pay me back as the lender.

• 39:49Speaker 02

  Wow.

• 39:49Speaker 01

  So I'm gonna evaluate that as well without telling you, I'm gonna evaluate that. I'm gonna look at your character, I'm gonna look at your ability to run a business, your, your management skills, your, your just acumen in this industry, do you have experience, do you lack experience? That's gonna dictate what I'm gonna ask for. Is it thirty percent, ten percent, fifty percent, or even an SBA guarantee or not?

• 40:10Speaker 02

  Wow. And of course, there's gonna be a personal guarantee with that, right?

• 40:13Speaker 01

  Definitely, definitely, especially if you have an SBA structure.

• 40:18Speaker 02

  Yeah.

• 40:19Speaker 01

  Always, always.

• 40:20Speaker 02

  Because somebody could just, you know, run the business and burn it down, right?

• 40:24Speaker 01

  That's correct, and that's why the personal guarantee, we equate that to having your skin, a little bit of your skin in the game.

• 40:30Speaker 02

  Yeah.

• 40:30Speaker 01

  Right? And I tend to agree with that. If you're actually, as a borrower, trying to buy into something and borrow money from a bank, you've got to have a personal guarantee.

• 40:40Speaker 02

  So when you use an SBA, you essentially don't need to put anything down?

• 40:43Speaker 01

  Depends, again.

• 40:44Speaker 02

  Yeah.

• 40:45Speaker 01

  You know, certain industries, certain industries, they'll require down payment, certain industries, like an SBA 7A, I think you can get up to 100% guarantee. Matt Damien told me last time. Again, those things change on a regular basis. That's why we have to have him back on the show to talk about that.

• 40:59Speaker 02

  I wish we had time to talk about startup businesses, businesses that's just an idea.

• 41:04Speaker 01

  Yeah, that, see, a lot of those financing and things like that for those, for those type, that type of business, it's not coming from an SBA or a bank, unfortunately, just because the risk is a lot, a lot higher.

• 41:15Speaker 02

  Yeah, higher.

• 41:15Speaker 01

  So it comes from crowdfunding, family funding, things like that. But it's, it's hard for me as a lender, I mean, I'll be honest, to, to, to go and say.

• 41:23Speaker 02

  Oh, it's a great idea. I'm gonna put all this money on it.

• 41:26Speaker 01

  Yeah, see, that's what happens for restaurant businesses.

• 41:28Speaker 02

  Yeah.

• 41:29Speaker 01

  The father makes killer sandwiches, and all the family, "Oh, you should open your own sandwich shop." Then the idea gets into their head, they go and just, "I'm gonna open my sandwich shop."

• 41:39Speaker 02

  Mm-hmm.

• 41:40Speaker 01

  Six months after that, they lost their shirt, and the sandwich shop is no more.

• 41:44Speaker 02

  Hmm.

• 41:44Speaker 01

  Why? Because they were undercapitalized, they did not do a good business plan, and they did not do their homework.

• 41:50Speaker 02

  Hmm.

• 41:51Speaker 01

  So we've got to be careful when you start in a business, you've got to have all the ingredients.

• 41:55Speaker 02

  Yeah.

• 41:56Speaker 01

  Now, I have a lot of, lot of respect for entrepreneurs, but you've got to do your homework still.

• 42:01Speaker 02

  Hey, you guys heard it.

• 42:05Speaker 01

  Yeah, so, so there's, there's a lot of opportunities there, especially from a borrowing standpoint, SBA, state guarantees, banks, banks, they make money by lending money. So, so if you, if you have, if you have a good business and you need to grow, go and, and, and ask for operating line of credit, equipment loan, inventory line, there's plenty of programs out there that could help you grow your business.

• 42:29Speaker 02

  Amen.

• 42:30Speaker 01

  Steven, this was a good show for me. I talked a lot.

• 42:34Speaker 00

  Deep Business 101 right there, business, business loans, entrepreneurs, which we'll have to get into the next show, because that is a whole other show.

• 42:43Speaker 01

  That's right.

• 42:44Speaker 00

  But I, I'll definitely write my, my notes, I've got Matt Damian on, on the line, so we'll have to get him on next round. But I appreciate it, you guys, if you missed the show or any past shows, just go search the Money Wise Podcast, free downloads, no commercials, listen anytime, but till then, be smart, be safe, be money wise.

• 43:17Speaker 03

  Securities offered through LPL Financial, member FINRA, SIPC. Investment advisory services offered through LPL Financial. LPL Financial and Money Wise Wealth Management are independently owned and operated.