Red flag?? What do I do???

[NCAgent828]

Otherwise if there are any investors reading this, let me know!! Haha

 

[Norwayguy]

I would love to get a loan for this. Unfortunately I do not have the money to put down and I’m a new agent so nobody will give me the chance without a current book. It’s a really tight spot to be in.

The owner has never had an insurance license and only owns the agency because his business insurance is there and writes it off of his taxes.

Question. If I am 100% Owner, can I get a loan based on the book I will have after acquiring it? In that case I could pay it off quickly and be done with it.

Hoping to acquire into my book and leave the name behind.

Hold on the owners policies is 75 percent of the book he can take his own policies anywhere

 

[NCAgent828]

Hold on the owners policies is 75 percent of the book he can take his own policies anywhere

If it is written into the contract that he cannot, does he still have the legal write to?

If it is written into the contract that he cannot, will that mean I have to write to discontinue payments to him? The rest of the book of business would pay all the bills without his policies and it would allow me to get a storefront location. This is a plus even if he did take his policies somewhere else, at least to me.

 

[adjusterjack]

My concern is finding someone locally. Is there a national service or a lawyer who may be in larger cities (Greenville, SC or Charlotte, NC?)?

Look for firms that have multiple attorneys. Call up and ask if they have one who handles business purchase.

What does an attorney typically cost for something like this?

Only the attorney you talk to can tell you that.

 

[Norwayguy]

If it is written into the contract that he cannot, does he still have the legal write to?

If it is written into the contract that he cannot, will that mean I have to write to discontinue payments to him? The rest of the book of business would pay all the bills without his policies and it would allow me to get a storefront location. This is a plus even if he did take his policies somewhere else, at least to me.

I have to ask why is he selling and why isn't this person close to him who has run the business not buying it?

 

[NCAgent828]

I have to ask why is he selling and why isn't this person close to him who has run the business not buying it?

The person who works there is retiring, instead of replacing that person he is selling.

 

[NCAgent828]

I have to ask why is he selling and why isn't this person close to him who has run the business not buying it?

He does not even have an insurance license so doesn’t know anything about it. He bought it as a tax write off because of his businesses insurance being there.

 

[Stephen]

Thanks so much for this input! I really appreciate it and it is good advice. I am becoming known I. My circles with my current agency name and the other agency name has been around for 20 years. They have walk ins and client base. I do need 100% immediate ownership. I will be hopefully be getting this resolved by mid week next week and have it all buttoned up. This is a unique situation so it has a lot of things spinning at one time.

1. I’m a new agent
2. His personal accounts make up 75% of the book
3. The woman who has ran it for 20 years will continue servicing his accounts
4. Because I’m a new agent I cannot get the financing needed to purchase without 100% seller note.

I would propose a deal for ownership of the 25% of the book that does not involve his personally owned businesses , with a revenue sharing agreement on the polices that do involve his businesses. Buying any business that has one client make up such a large portion of the clientele is a huge risk , and the fact that that ONE client is also the seller of the agency can make things even more sticky.

I would also insist on a strong non compete clause signed by the both the current owner and the agent that is currently running the agency.

Like other posters have said, you need to hire an accountant and M&A attorney.

 

[goillini52]

What does an attorney typically cost for something like this?

 

[NCAgent828]

I would propose a deal for ownership of the 25% of the book that does not involve his personally owned businesses , with a revenue sharing agreement on the polices that do involve his businesses. Buying any business that has one client make up such a large portion of the clientele is a huge risk , and the fact that that ONE client is also the seller of the agency can make things even more sticky.

I would also insist on a strong non compete clause signed by the both the current owner and the agent that is currently running the agency.

Like other posters have said, you need to hire an accountant and M&A attorney.

That’s a really good plan actually. Own everything but his accounts. That’s exactly what I’m going to propose. That way, realistically if he pulls his account, I don’t have to pay him anymore and I own everything still.