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Succession Planning For Small Business: How Your Bank Can Help

Podcast recorded: March 29, 2021

Stearns Bank Vice President/SBA Lending Manager Josh Villa discusses how succession planning hasn’t changed much during the COVID-19 pandemic. Creating a clear plan with the help of a lender, is the most important thing a small business owner can do, whether looking to buy or sell. Josh also offers tips about how to approach a lender with your plan.

Lessons Learned

  • Small business owners must have their finances in order before committing to a succession plan, especially before sharing the plan with a lender.
  • Most succession plans have an exit, estate and business plan that involve goals and key decision dates.
  • ESOP transactions and full transfer of ownership to a non-relative are becoming more common in succession planning. Sometimes competitors are the ones taking over a business.
  • No one can predict the future, but financial institutions and business owners now face more uncertainty due to the pandemic, especially for timing on when a new owner takes over.
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