Podcast Summary: Business Lunch Snack Time

Episode: How to Thrive in a Frozen Funding Market
Host: Roland Frasier
Date: November 12, 2025

Episode Overview

In this special “Snack Time” edition, Roland Frasier tackles a pressing and urgent challenge: the dramatic freeze on small business funding triggered by recent SBA (Small Business Administration) shutdowns. Drawing on research, firsthand insights, and step-by-step playbooks from real dealmakers, Roland and his team outline how both business buyers and sellers can not only survive but actually thrive when billions in traditional loan funding are locked up. The episode guides listeners through inventive non-SBA strategies, negotiation tactics, speedy closing frameworks, and specific tips to stay ahead of the anticipated tidal wave once the SBA gates reopen.

Key Discussion Points & Insights

1. The Scale and Impact of the SBA Freeze

• Massive Freeze: The SBA is not processing key loan programs (7A, 504), stalling approximately $170 million in loans every business day (01:41–02:09).
  • "That's around 320 small businesses daily stuck. The deals are on hold..." (02:10)
• Economic Ripple: Last year, the SBA backed 84,400 loans, totaling $45 billion. If the freeze drags on, the GDP impact could hit $7–$14 billion due to lost activity (02:22–02:59).

2. Why Waiting Is a Losing Strategy

• Backlog Building: When the shutdown ends, lenders will be swamped, leaving latecomers at a disadvantage.
  • "If your deal package isn't perfectly clean, totally ready to go, you're not going to be first in line. You'll be buried." (05:13)
• Short-Term Opportunity: The funding pause creates a temporary buyer’s market for those able to move without SBA loans. Reduced competition means better opportunities but only for a limited time (03:09–04:13).

3. Dispelling Myths About SBA and PLP Banks

• PLP Reality: Preferred Lender Program status doesn’t help during a total SBA shutdown. No new loans can be approved until the federal agency resumes operations.
  • "They are completely blocked from issuing new SBA loan approvals, full stop." (04:29)

4. Negotiation Leverage in a Frozen Market

• Liquidity Shock as Leverage: Prepared buyers can use the situation to negotiate better terms or structures, especially emphasizing their ability to close without SBA funding.
  • "You're offering them the one thing that's suddenly scarce, certainty of close." (05:49)
• Critical: Not mentioning the shutdown risk in communications is a red flag for sellers (06:11).

5. Building a Non-SBA Capital Stack

a. Seller Financing as the Foundation

• Aim for seller notes of 60–90% of the purchase price, sometimes using deferred payments (06:42–07:07).
• Use CVRs (Contingent Value Rights) as an alternative to complicated earn-outs (07:17–07:51).

b. Senior Debt from Non-SBA Sources

• Community banks, credit unions, or non-bank lenders underwrite standard term loans based purely on collateral and cash flow.
• Add asset-based lending (ABL) against receivables or inventory, and equipment financing (07:58–08:43).

c. Expensive Bridge Capital (Mezzanine/Revenue-Based Financing)

• "This is where it can get pricey...you're paying a premium to close the deal now, secure the asset and capture whatever advantage the current market offers." (08:54–09:08)
• This is short-term, to be refinanced once SBA reopens.

d. Plan the “Escape Hatch”: Refinance Clause

• Deals must include pre-negotiated terms for easy SBA refinance later. No prepayment penalties, explicit right to swap collateral, intercreditor agreement (09:34–10:06).

6. Seller Playbook: Becoming “Exit Ready”

• Flexibility on Terms: Willingness to accept more seller financing or escrow for certainty. Certainty commands a premium (10:32–10:54).
• Back-End Cleanup: Proactively clear UCC liens, settle tax issues, and file organization to streamline lender approval post-reopen (10:54–11:16).
• Data Readiness: Prepare “QOE-lite” financial packages — 8-10 clear schedules, cash flow proof, customer concentration, etc. to avoid delays (11:16–11:45).

7. Accelerated Buyer Playbook: The 10-Day No-SBA Sprint

• Days 1–4: Narrow target list, focus on deals less likely to attract SBA users, obtain preliminary nods from senior/non-bank lenders/ABL/mezz providers (11:58–12:36).
• Day 5: Issue a heavy seller-finance, CVR-structured LOI, explicitly stating right to refi after SBA restart (12:39–13:03).
• Days 6–8: Fill the data room, create a risk memo outlining shutdown risks and non-SBA stack (13:08–13:42).
  • "It's your credibility document for the seller...shows you have a concrete plan to close despite the SBA freeze." (13:21)
• Days 9–10: Negotiate final terms; consider “refi triggered interest uplift”—seller gets higher interest or bonus when buyer does refi with SBA (13:52–14:32).
  • "They want you to close fast now, and they also want you to succeed in refinancing later because it means more money for them." (14:19)

8. Geographic “Hot Zones” and the Upcoming Backlog Wave

• State Data: Focus on regions hardest hit—e.g., California: $126M/week frozen; Texas: $88M/week—meaning super-intense competition once doors reopen (15:30–15:58).
  • "If you're a buyer or even a seller in one of those high volume states…think about the explosion of activity, the sheer competition for lender attention and good deals that's going to happen the instant the SBA gates reopen." (15:32)

Memorable Quotes

• "Waiting is actually the losing strategy here...This freeze counterintuitively creates a short-term opening for certain buyers."
  — Co-host, (03:09)

• "That preferred status, that delegated authority...they are completely blocked from issuing new SBA loan approvals, full stop."
  — Co-host, (04:29)

• "You need a different plan if you want to close during the shutdown."
  — Co-host, (04:53)

• "Certainty has a premium in this market."
  — Co-host, (10:51)

• "It's about securing the asset and your position before that bottleneck hits."
  — Co-host, (15:13)

Key Timestamps

• 01:41–02:09: Staggering daily impact of SBA shutdown
• 04:25–04:53: Dispelling myths around PLP lenders’ power during a freeze
• 05:27–06:11: Negotiating leverage and the need to address shutdown risk in offers
• 06:42–07:51: Non-SBA capital-stack structure: seller finance & CVRs explained
• 09:23–10:06: Building pre-negotiated refinance into bridge finance deals
• 10:32–11:16: Seller “exit ready” checklist during a shutdown
• 11:58–14:32: Aggressive 10-day buyer sprint blueprint; interest-uplift tactic
• 15:30–15:58: Hot-state analysis and the coming squeeze when SBA reopens

Final Takeaway & Call to Action

The message is clear: momentum is everything. In a frozen funding market, moving fast, getting creative with deal structures, and being radically well-prepared are critical—sitting out means missing the “buyer’s market” window and risking much tougher conditions post-reopen. Localize your urgency if you’re in high-blockage regions, and don’t wait to get your financial and legal house in order.

“Acting now isn't just about maybe getting a slightly better deal. It's about securing the asset and your position before that bottleneck hits.” (15:13)

For further guidance on navigating small business acquisitions—even in challenging times—Roland invites listeners to check out his Epic Deal Fast Track program (details in episode, post-content section).