Everywhere Joshua Kim looks, he sees opportunities for small businesses to snowball by raising outside capital. Whether they are start-ups looking to get off the ground, established companies seeking to expand, or entrepreneurs wanting assistance on financing a business acquisition or partner buyout, this SBA (Small Business Administration) financing expert and M&A entrepreneur is keen to help.
“There is a lack of education for business owners about different financing offerings, and the COVID relief effort rollout highlighted this,” Josh explains. “Most business owners were content with their current financial institution but never had any meaningful relationship beyond their teller. Now there is a real opportunity to educate people on how to get capital and help them do just that.”
Born To Be An Entrepreneur
Josh, 23, is uniquely qualified to provide advice due to his background. He started his first business selling realistic-looking Airsoft guns and equipment when he was just 14 and made a few thousand dollars during his first summer. The teenage entrepreneur expanded this venture through eCommerce outlets on Amazon and eBay. He then started a second business buying high-end watches online or locally and reselling them at a higher price.
However, Josh soon realized these pursuits had a ceiling and would not enable him to achieve his goals, so he shifted his ambitions up a level. He read ‘Your First 100 Million’ by career mergers and acquisitions entrepreneur Dan Pena and traveled to Scotland for one of the author’s events. He was the youngest person there, but he was very self-motivated, and he wanted to learn about raising capital and buying and selling businesses.
Josh’s dedication paid off. While working a full-time job at a software technology company in Los Angeles, he completed his first business acquisition – a home health business – in February 2017. He leveraged an SBA 7a loan for the purchase and ended up acquiring two more companies shortly afterward. However, while managing, growing, and running those businesses, he learned he had more affinity for doing the deals than running and working them. Consequently, he left the healthcare industry a few months ago to pursue his current financial services and Fintech.
SBA Financing Provides Amazing Opportunities
Joshua Kim’s experiences of acquisitions showed him how powerful SBA loans could be if companies used them effectively. “SBA loans are God’s gift to the green earth,” he says. “They are objectively the best financing option available globally for a small business owner.”
The entrepreneur continues, “The US Government guarantees the majority of an SBA loan, so lenders can provide you terms they otherwise wouldn’t be able to do. In addition, because the government mitigates the risk, this incentivizes them to make loans as they are not risking their own money. For a bank, it’s like playing poker, but they know that 75% of the money they are betting has an insurance policy if they are dealt an unfavorable hand.”
Josh’s latest company, 7A Accelerator, is a consultancy business that helps businesses secure SBA financing. They work in a one-to-one consultancy fashion by assisting the business owner with pre-application homework like cleaning up financial statements, itemizing add-backs to cash flow, or listing one-time expenses for a potential lender ahead of application. They also help companies find the ideal lender to suit their industry, location, and loan type and then assist with the deal structure to save time.
Josh believes it is a fantastic time for businesses to take out this kind of loan because there are currently many incentives in the market. However, he advises clients to approach banks near the end of the fiscal year when they are most focused on hitting their targets.
Getting The Capital To Support Your Business Goals
“To act on big ideas, you need capital,” Joshua Kim explains. “And the sooner you get that capital, the sooner you can execute on those ideas and grow your company. It’s a flywheel effect, and it’ll compound over time.”
He believes many companies fail to secure financing through SBA loans because they either do not know they can, do not know enough about them, or do not know which bank to approach.
“I’ve worked with clients netting over $1M per year who have been turned down for an SBA loan to purchase a building without any logical reason,” Josh explains. “The best lenders, contrary to what you would think, aren’t big national banks. They are niche nationwide or regional SBA lenders with experienced, knowledgeable staff. 10% of lenders are doing 90% of the volume.”
Through 7A Accelerator, Josh and his team streamline the borrower process by standardizing and simplifying the application process. As a result, they ensure borrowers are paired up properly with one or two lenders best suited to their unique capital needs, saving them from unnecessary rejections from unsuitable banks.
“Nobody likes getting rejected,” Josh says. “If we can save another business owner weeks, if not months, in the capital-raising process, as well as save them the heartache of getting rejected, our team counts that as a win.”