Ep 362: How Buyers in the UK, US & Australia Are Funding Online Business Deals Today with Ciaran Burke

With kind traditional financing, it's quite formulaic. It's based on numbers, it's here and there, it's in your business. With that position, it's a lot about the future. I think investment is ready in terms of having those key documents there, but you really need to focus on that kind of what happens if I get this finance element as well, in terms of that forecast plan, but equally speaking.

How do you back up those assumptions? How do you know how to go to market? How do you know how to trade? And being able to articulate all those key points is really, really important.

Yes, now you can get acquisition finance in Australia, the UK, and Canada. Also, when using this finance fund or this funder or the broker, the finance broker should say online finance broker. You can also get it in America, as well, which you've always been able to, but it's a lot easier in Australia, the UK, and Canada now.

My name is Jaryd Krause. I'm the host of the Buying Online Business podcast. And today I'm speaking with Kieran Burke. He is the COO and co-founder of Swoop, which is a global SME funding marketplace that helps businesses discover debt, equity, and grant options using integrated business data.

He co-founded Swoop after a career at KPMG and building the creative network hive. And now, he leads the product and operations work that matches businesses with suitable finance solutions across multiple territories. And he helps people acquire online businesses using Swoop.

He's helped hundreds of thousands of businesses get finance and funding through simple options that traditional banks often miss, making it a powerful route for buyers who need acquisition capital.

Kieran also frequently speaks about debt, equity, and grants to fund acquisitions in the UK, Australia, and the US. And in this pod, we talk about how to get finance to acquire business in the UK, Australia, the US, even Canada, and online business, e-commerce software, and media business using Swoop.

Now we didn't mention this in the podcast, but it is a free service. Swoop does not charge, and you can get online. You can check it out. I've got a link in the description where you can find a business and submit the business to see if it qualifies to get finance, or to acquire it. If you have any questions, of course, go through the pod.

I'm sure they'll all get answered there. If you've got more, reach out to us, but enjoy this. This is fascinating. I'm so glad to be able to share this with you guys. Enjoy the pod.

Kieran. How do you pronounce it? Is Kieran?

Thanks for the poll. Thanks for jumping.

Absolutely. Congrats on what you built with Swoop. How long has Swoop been around?

So it's been around for about seven and a half years, kicked it off in late 2018.

Cool. Congrats. And when did you start working with people in Australia in SWOOP?

No, it was actually relatively early on in our journey. I want to say it was like hthe eight of COVID, 2020, something like that, which is a very unusual time to look at expanding. But we're quite fortunate in that one of our kind of initial investors is an organization called Enterprise Ireland, kind of like a state VC.

And they're always kind of onto you to expand and think about export as an Irish business. And one of the markets they always kind of felt very strongly about relative to what we do in terms of funding small businesses was to look at the Australian market.

And they had a guy in markets, Scott Patterson was his name, based out in Melbourne, and just started jumping on with him, kind of learning a bit more about the market. And he was super well connected into the SME financing space and felt it was a really good fit relative to what we did in terms of a really active SME population, a strong economy, and a good strategy.

blend of different banks, lenders, refunds, and we were always building SWOOP to have infrastructure so it could work in any market. Australia First was our first test bed in trying a new market and I think put it live, I want to say in early 2021.

Cool. Awesome. Congrats. I'm pretty sure I was speaking to Blake Hutchison from Flipper, who was talking about launching something, working with you guys on my podcast, maybe a year or two ago, you guys popped up with a bunch of other people that I know who have looked at Swoopp as an option just through the backend for my audience, I've been referring people to swoop and you know, people that are not in the US anyway, because the US is a lot of people buying businesses in the US with SBA loans.

Australia has been, people have been asking me for years, and in Australia, the UK, and Canada. And so I'm just thrilled to be able to share this with everybody, that is an option now to acquire an online business using, using financing through you guys, swooping guys. I'll put a referral link to everything as well.

And I want to just dig into questions because people are going to have so many questions about it. Do you have an idea of where we should start, or should I just ask, just getting to my question?

Yeah, I mean, I can give it a colour because it's been great working with Flippa since I kind of connected about a year and a half ago, because they've just got an incredibly active community of businesses in the SaaS e-commerce space that are super active about buying and selling businesses. And what we want to do is give liquidity in terms of a sense of optionality, no matter what market you're in.

Naturally, different countries will have different market dynamics. You touched on the United States, and they're very fortuitous there. And our team in the US gets to leverage the SBA or Small Business Association offering, where if you're in the UK or you're in Oz and someone says to you, would you like half a million dollars for a pre-revenue startup? They're not really going to believe you a lot of the time. Where is it?

Yeah.

Especially for you, anyway, yeah.

Different markets obviously do have their strengths, but I would say across all of the markets that you mentioned, from the UK, Australia, and Canada, there is good liquidity in all of those markets. It's probably just knowing how toput your best foot forward a lot of the time.

Absolutely. I'm glad that you mentioned, yeah, people can use Swoop and to in the States as well and can leverage off SBA through you guys, which is really cool. I'll get the fees and all that sort of stuff soon, but what's for say a buyer in the UK, US, or even Australia, they're looking to acquire an online business. What types of funding on your platform are more realistic for a small acquisition, like a 500K?

Acquisition talking like an e-commerce brand that might be doing 200k eBittar or SDE. What sort of options do you guys provide? What does that look like?

Yeah, well, I mean, I think you're in a pretty enviable position if you're doing say 200,000 EBITDA and looking to acquire something that's about 500,000. Ultimately with your current trading, just based on that limited information, you're going to have a lot of different optionality for yourself, whether you're in the Aussie market, UK market, Canadian, US, just taking something like traditional term lending, you can start to look at that based on the profit margin that you're currently carrying to be able to afford that 500,000.

What you're probably trying to think about is your biggest drivers, which could be speed. You might have hot opportunities, therefore you might want to go super quickly. And that's ultimately going to affect potentially certain pathways that you go down. Naturally, your most well-known tier one high street banks, your knobs in Australia, your Barclays in the UK, your TD banks in Canada, Wells Fargo in the US, they're going to have access to the cheapest capital of those capital.

The downside with a lot of those is that the infrastructure that they've set up to lend through isn't particularly quick. So there's a lot of stage gating. The systems aren't the quickest. There are multiple ICs. It's quite manual, bringing a lot of documentation together. Now they're trying to move up.

You're moving big, big juggernauts. So it's something to always have top of mind. Now the other kicker in there is that a lot of the governments are also incentivizing some of the bigger banks or bigger alternative finance players to encourage kind of lower, not say lower lending, lending to more smaller businesses outside of the traditional mid-market space.

So in the UK, these things like the growth guarantee scheme, which again, introduces this concept of preferential rates and reduced security. And so again, that can be very attractive, but similar to the kind of traditional tier one, quite long in its process.

The trade-off on the speed side of things is that you are taking slightly increased rates. But what I would say in both the Aussie market, UK market, and all the others is that those bigger alternative finance term lending houses, Judo in Australia, or funding circle I walked in the UK.

They're starting,g or a grade A rate position has come down a lot more. We're starting to see things in 8%, 9% rates, which we'd never seen before from those types of players. And obviously, they can be a lot quicker. You're talking access to capital in a couple of weeks, like two weeks versus maybe 12, 16 weeks.

So it can be quite dramatic. The other side of things is e-commerce can often have hyper growth, can go really, really quickly, which is fantastic because you just got that low barrier to get access to marketing and get your marketing right.

You can absolutely fly. The downside is that sometimes when accessing finance, the way a lot of the underwriting models are set up is they love age. love anything that's old and has been around for ages.

You're flying out of the blocks and maybe haven't filed at least two or three years' accounts, potentially what happens then is you don't get access to that longer form of capital, where you might be going for the 60 months, 72 months facility.

So that's something to be aware of if you're trying to get something on the longer side of things and you are not maybe you haven't filed two sets of pens. Sometimes that's a bit of a barrier that early-stage acquisition-type businesses come across.

Obviously,y most businesses that are gonna get approved are gonna have sort of, you need two years of tax returns typically, right, on your platform for an acquisition to acquire that business. So, sticking with the lens of acquisitions, what is a typical deposit, say for an acquisition of a 500K busines,s to say maybe a $5 million business? Are we looking at 20, 30%, 40%?

Deposit, caching.

Yeah, so actually, you've touched on a really interesting point. In some cases, where you're well trading and let's go back to the example of the 200k EBITDA margin looking for 500k, you potentially don't need to put relatively any, in some cases, no deposit down. A lot of that comes down to sectors.

So certain lenders love certain sectors. One of the biggest forms of acquisitions we see in SWUB is often in professional services, things like accountants, dental practices, and a lot of banks. Lenders love these pharmacies. So often, if you've got a trading business, a strong team, and sector expertise, you can get near a hundred percent funded on the acquisition.

Getting into online businesses, again, if you're in the trading space, that is going to, if you're trading and moving forward, you're typically looking, probably in the summer region, on 10 % on the good side to 20%. If you're a startup, newly set up business, it doesn't preclude youfromo acquisition finance, but what's the trade-off there? They're expecting a lot more skin in the game in terms of what you're looking to do.

So again, they're going to look at your customer's different funds. Do you have sector expertise? Is there something that really makes sense to you on this acquisition front?

So, expecting something in the region of maybe 30, 40 % down on the deposit side of things, or looking at external factors in terms of your wider assets or net asset worth, and if there's something on a security side of things that they can look at.

Are you just for clarity, are you talking about somebody that already has a business that's trying to raise funds to acquire another business? Are you talking from that lens, or are you talking from the individual who doesn't have a business yet, that's looking to acquire a business?

Because most people listening to the pod and people that I work with are individuals, investors that are looking to acquire a business, and they don't have a primary platform business. You're speaking from that lens as well, like when you say you mean.

Yeah, so both sides of it, okay, one, you have a trading business, and you want to grow through that and do a buy and build, or you're starting, and you feel this is what you want to do. I want to go and earn and diversify my income stream, and I want to take over and run a business.

Yes, you can start to go down the acquisition finance route. Ultimately, even though there's nothing in that business per se, you, as an individual wanting to purchase, are going to have to set up a vehicle or a business entity to go and do it.

And in doing that, you're going to have to put some sort of deposit down. As I said, it's probably going to be in the 30- 40 % type range for your very first one. As you get up and trading, that percentage will definitely decrease quite substantially, or they'll look at your wider net worth and see if there's anything from a security point of view that can be looked at. Typically speaking, that's property.

Guarantors and guarantor, like, yeah.

Yeah, and understandingwhats the equity position of the property or properties that you have is, and whether a first charge or a second charge can be taken on that. Once, obviously, the person is comfortable looking at a more secure lens.

Cool. And when you say individual investors looking to acquire a business, are you saying that through using Swoop, they need to set up a business entity before acquiring the business, to bring the business into and through that business entity, and they need to put the deposit into that to be able to acquire it? Is that what you're saying, or am I misunderstanding?

Yeah, so you'll certainly be in our, we just do commercial finance. Don't get involved in personal finance whatsoever. So if you're looking to do kind of anything to do with an acquisition, you're going to have to set up a business entity.

Naturally, there's not going to be any trading history business going through that, but that vehicle is what's being used, what's being funded, ultimately go and acquire that opportunity that you've seen.

Yeah. And you could say he wanted to buy a $600,000 business. You could put maybe $150,000 in that and use that as a deposit to acquire that business with acquisition finance.

Yeah. Got you.

Yeah. And often what you'll see is that what we probably haven't touched on is in a lot of these transactions, the agreements, you rarely see that all of the, whatever the agreed value in the share purchase agreement, there's a down payment, and then there's milestone payments based on outcome success metrics.

Maybe it's a profit share. That's very, very, very common. Often, it's really important if you're thinking about the acquisition to think about what the actual cash outlay is on day one. That's probably the most important number to be aware of. Second one is when you're up and trading, can you then work the milestones and the loan through that?

Yeah, cool. Awesome. As you said, there are terms, like it's pretty alarming that some lenders are looking at even 9 % interest rates. What's the average at the moment, and what are the terms instead of like loan terms, other loan terms like years and whatnot?

Yeah, so I would say if we go into kind of say more the e-commerce type of state things, and if you're looking at that kind, I just want to share that this is probably going to be an average.

Each business is going to have different terms and stuff like that. I just don't want people to hold you accountableforo this sort of thing. It's like, yeah, no, I can get this, and this is what I expect. like people, like when you're listening, this is just like an example of an average of what the current market could provide for an example.

And certain rates mean very different things to certain people because they may have dipped their toe in a market in a period where it was super low or super high. It can be, there's a lot of relativity and obviously different base rates in different markets as well.

But like,e let's take the kind of more early-stage individual setting up a business, maybe in the e-commerce space, looking to do that kind of six-figure acquisition with a willingness obviously to put that kind of deposit down, I would say then you're looking again, term lending, of your bog standard side of things.

What you're probably looking at, I would say, of a mid-teens type scenario, where you get, as I was talking about, those really single-digit type rates, is more where you're in the kind buy and bill phase. Trading volumes are going through both sides.

Naturally speaking, there will be ones that are higher than that, but ultimately one of the most important things irrespective of acquisition, any financing is always, always forecast and do your cashflow modeling and really make sure that whatever that monthly sum is, because I often think people can get very fixated on rates and I understand why you want to get what works, but you really need to understand what the actual amount is coming out every month and seeing does that work with your model, your business flows, that's just so important and I can't stress that enough.

Agree. Some people get fixed out as like, it's cheaper money when it's eight, 9%, but like, what if the business is not as profitable as say something that you might purchase that is a bit more profitable, but has a higher rate?

What's the cash back per month? Yeah. Where does that sit with you? So yeah, it depends on the business, the sector, and the terms, I guess, not just the interest rate. So I'll let you share a bit more.

It was just like always; the length of the term can make a massive difference. So, you may on the face of it seem insane, you're going for something that might be a way higher rate, but you're able to spread it over five, six, seven years as opposed to three years.

It's going to make a measurable difference in the early-stage cash flow. And the thing also people should be super cognizant of, but maybe when you're doing it for the very first time, it's hard to, I suppose, believe it or feel it.

Refinancing is a real thing. You should always be thinking about what the milestone is that I want to hit in this business that ultimately unlocks new financing or cheaper rate restructuring or something that can now give me an extra bit of capital to go on to the next opportunity, but doing it at a better rate. So always be thinking about that. If you feel that again, because you're coming into it first time, you're never going to get the best rate, the best deal.

But if you feel very strongly, have good conviction about the business model and feel that you're, you're tracking well, then I would always be saying, even after I would say four months, start looking. think certainly after, after six, you're going to have buying slenders willing to start to look and always kind of have that in your back, your mind.

It's a really good point because when you're starting an entity and just putting a bit of cash in there, that's what you're gonna purchase the business under, that's not really trading.

The rate's certainly gonna be at the highest until you put a business in there, and then you are trading,g and then you can refinance to a lower rate with a lot more certainty because you're trading with a monthly cashflow, right?

What can you see, what could you just give as an example, a very average of what it looks like for the acquisition rate,e and then six months or 12 months later.

Yeah, so it's kind of similar to kind of what I was alluding to earlier on in that you might be using the refinance, not necessarily to smash the rate out of the park, but your original facility was 36 months and the new finance, okay, you've got a bit of credit worthiness on your, you've filed your first set of tax returns. Okay, we're gonna, we're happy to kind of keep a similar rate, but we're gonna extend this out to a60-monthh facility.

That's going to make a measurable difference to what's coming out of your business every month. Obviously, on the flip side as well, banks and lenders will be able to look at that specific rate if you want to keep that similar term.

The other thing I didn't touch on that again, business owners or first-time business owners can be cognizant of is that some facilities will have penalties and not penalties around things like early repayment or contributing over and above the facility amount.

What you often see is certain businesses that know they are highly cash generative. They just need to get to the start line, or they're buying something that's a good trading vehicle, but they know headwinds are good and there's a significant opportunity or a partner or something that's going to demonstrably change the numbers in such a way that the cash position is dramatically going to change, maybe in a near-term scenario.

What they're often looking at is what gets me this facility on the speed side of the transaction, because they're confident that after this starts to happen and the cash starts to come through, that they can actually just repay or dramatically reduce the facility.

So again, if you happen to be in that position or acquiring businesses of that nature, looking at facilities that don't have those early repayment penalties is definitely something that's worth checking and looking at the tees and sees.

Yeah, absolutely. Yeah. No prepayment penalties are a big one. So many avenues to go down. I guess we'll start with what a business, a six-figure to seven-figure business need to be able to have a higher chance of being accepted for a loan?

We mentioned two years' tax returns here, but what, cause I want to ask you about how somebody will submit. Yeah. Acquisition finance soon, but yeah, what does that just mean? What are some of the key things, I guess, for a business?

Yeah, it's a great question because people sometimes get really frustrated, like, these these bank's lenders are so difficult, like they don't give any money. And like 10, 15 years ago, I just had to go down and talk to a person, and they just gave me the money. And it's like, it just doesn't work like that anymore. I'm like, can't change it. Like, that is not the system.

And you get this high level of expectation that they should be able to get finance. It's like you wouldn't be able to do this without them. Like go through some of the hoops, you know, and accept that the hoops.

Exactly, exactly. Just be like funding ready. Like, cause on the flip side, there's probably never more liquidity out there in the market. You've got a great load of options, not just playing alternate lenders.

Like you've never had more liquidity, but you got to play the rules of the game, which is they've got to analyze it and make an assessment and a judgment so they can get their capital, which is not an unreasonable thing to do. You swear, but I went down, and they just gave me that.

Like, yeah, they may have, doesn't work like that. Just get your house in order. And also, in getting your house in order, it helps you massively because you think things through. You understand your business. If you're a trading business, you also understand the acquisition business a lot more.

Like these are healthy exercises to go down. I mean, the bare bones, the obvious ones are again, let's take it from the position of I'm a first-timer to this. I don't have a trading entity. So why me?

Is what I need to do from a documentation point of view of my CV, my background, and my net worth. What is my assumption about this business? What's my business plan?

What's my thinking around that to justify why it makes sense for me to come into the mixer here? On the trading business, we're going to want to see all the associated financials with it, at least two years' tax returns if they have them.

business that's going to be acquired. You've got your CV, and then you've got your one pager for, which is your business plan, presenting to the bank and why you're the right person to take over the business. And then you've got the business that you're going to acquire.

That's it.

Two sides of the fence. Yeah, on the business that you're acquiring, you want to see the tax returns last set of six months' bank statements, and their latest management accounts. So their income statement, P&L, if you're okay, and balance sheet. And what they really, really want to see is a kind of forecast cash flow model over three years. So you're coming to us looking for this sum of money.

Do you know how to spend some of this money? Again, a very reasonable question to ask. People get sometimes mortally offended, like, why are you asking me this? Well, because they're giving you the money. So you better, you better explain how this, this, and again, really healthy exercise to go down.

Good because you use it to your advantage, you know, as a new owner.

There's work, all the different levers on the, on the cost side, on the revenue side, what makes the business home, where are the challenges? How does the cash wash through? Where are your margins? Is it difficult? Is there overhead? And, and, and really being able to talk into it. So I think.

They're the kind of key documentation, key documents at the beginning, really, to understand the wider proposition. would say acquisition financing is often a bit like equity finance, where you do have that blend of quantitative and qualitative working together.

So whether it's a traditional bank or alternative finance lender, yes, you're going to have the fintech element, sense checking, and running the data through and the numbers, checking the coverage ratios.

There's a real sense of wanting to understand the wider business proposition, the macroeconomic environment that this business will work and trade within, and really understand, as the person acquiring the business, kind ofwhats their background is?

Do they have an unfair advantage? Can they talk into it? Can they execute? And so showing an unwillingness to go into that and talk about it is not good in the credit underwriters' eyes.

So it's just being aware that you really need to come with some depth of thought. Again, I don't think it's unreasonable, but it is really important to make people who are interested in going down this route aware, particularly if you're doing it for the very first time.

Absolutely. This is why it's really valuable to have, say, a M &A advisor on your side that can set you up with your CV, your one-pager, business plan, your cashflow modeling, forecasting, and help you.

Also, AI is going to help you in buckets. If you're short a couple of dollars on not wanting to fork out fees, AI can hallucinate. Please make sure you're reading the output. If you're prompting well, it can absolutely start to give you really good foundations in terms of how you want to structure your thinking. How you prompt it is all that's where your IP really needs to come in, but absolutely can really help you put and articulate things, things together.

Use this with my buyers where I have them sort of mention what their skills are in their roles, jobs as executives,s and how that translates to why they should be acquiring this business to build out that CV and that one-page, and then also you can do so much financial modeling and stuff like that.

So what are we looking at in terms oflead time for an acquisition like this? Well, you mentioned here that some businesses that are already trading could have a two-year lead time. Mean two-week lead time to get cash with an acquisition, surely it's different. Surely we're looking at 60 days or more.

Yeah, so like absolutely you could invariably do something in a two week, two, three week.

time period, if I would say it's more trading business with trading business, because if you've got all the financials to hand on both sides of the fence, it's a lot quicker, and you've got easy things to point to legitimize both sets of parties.

That's where you have more of those expedited processes. But yeah, I would normally expect something in the region of 10 to 20 weeks on the acquisition side of things, particularly if it's a first time.

One just takes that little bit longer to pull all that documentation together. And again, the bank or the alternative lender wants an extra layer of robustness. And then sometimes you're using these kinds of government-backed facilities, whether it's the SBA in the US or the GGS in the UK.

And that probably adds another four or five weeks to it because it's just quite process-driven and there's a lot of checks and balances along the way.

And I absolutely, can have empathy with business owners in those scenarios because often it can be a bit repetitive in questioning, but that's kind of how they've set up their, I suppose, decision-making matrixes to double check along the way, which is again, if you're a first time into it, you just, you just have to bear with that pain a little bit. I think again, going back to the AI point, not just maybe using it to kind of build documentation, but I also think of a query.

Get it to the bank, the underwriter, and analyze what you've put together. It can often help you spot maybe a hole or something. So doing that before just getting the application ready is not a bad exercise at all.

Yeah. Preempting some of the questions and the things that data is going to be requested. If the AI, yeah. If you prompt it in the right way. 10 to 20 weeks, depending on the size of the deal, the complexity of the deal, and the way I like.

What I like to share with people is if you're getting finance for a business acquisition and it gets approved, like you go through all these hoops and it gets approved, it is so valuable to know that it got approved because it's who's going to lend to something that's not a good business.

It's really good confidence that you're likely buying something semi-decent because the bank's going to invest in it, let alone yourself as an investor. So why not use them as a part of your due diligence service? Like, let's go.

Such a... because you're not getting billed for it.

I mean, you've got to understand why.

Yeah. So what else am I missing here? Somebody, when they come to you guys, as I've seen, and you guys can go away, check out the link, you could submit your details and submit a business to get approved for lending, right? What are some of the things that could get in their way, or how do we make it as easy as possible for somebody listening to that, who is an investor looking at acquiring a business, to get started with you guys?

So I think it's been kind of document-ready. So kind of the things that we touched on, particularly thinking about myself and what I can do if I find an opportunity that I'm interested in. So before going to the bank, I want to kind of have done my DDD on that business and get access to all their key financials, their history, their live information.

That's where the bank statements are really good because file accounts or file tax returns are one thing, but you want to see what's happening here and now. And again, from yourself, just prepping in terms of your CV background and business plan, that's going to be super important.

And the other side of the fence as well is important because again, with kind of traditional financing, it's quite formulaic. It's based on the numbers, it's here, and now, it's in your business. With acquisition, it's a lot about the future. So I think investment ready in terms of having those key documents there.

But you really need to focus on that kind of what happens if I get this finance element as well in terms of that forecast plan. But equally speaking, how do you back up those assumptions? How do you know how to go to market?

How do you know how to trade, and being able to articulate all those key points is really, really important. And sometimes the business owner or the person who's looking to acquire definitely knows them.

But all of a sudden, you get into a room, and you're going through the plan, and you haven't kind of articulated them as best as you can. And you may not give the best version of yourself. just thinking that those through and being like, well, this is exactly how I would use this cash, and breaking it down and talking at it from a numerical point of view, and the levers that you see in the business. That's going to add a huge amount of play when you do get into those conversations.

Absolutely. So, having a strong business plan that AI didn't just create, that you understand and can explain, you can, even if you didn't, don't get a lender asking you about it, you can still go away and execute it with confidence knowing that it's going to get the result. Which, again, as you said, like that alone is the banks are going to ask for it. The lenders are going to ask for it, but by having that, you're putting yourself in a great position.

So like, I know we kind of touched on e-commerce as a theme, the most common go-to market for e-commerce is going to be paid marketing. So if you don't understand paid marketing funnel and understand times like CAC, ROAS, or LTV, then you're not getting the money.

Like, so you really need to understand how much the costs require if you get them in. Do they return? If they do, how many times? What does that look like? Is there seasonality? When, when do you do it? What type of ads?

Which kind of platforms, and how can you execute on that? If it's not a paid strategy, what is your non-paid strategy? Really talking about the levers of the business and the kind of unit economics that sit underneath them, really, really important.

Yeah, this is so exciting to know that there's somewhere I can share for people in Australia, the UK, and Canada to go get financing. It's been just the American show for a long time now. The rest of the world is coming into play, which is cool.

The final thing I would say isthat it gets super exciting once you're up and have done it that first time. Your options only get more and more, and you obviously have less of this kind of having to prove yourself at that initial due diligence phase when it comes to actually getting credit.

But the type of credit you can then access changes. So it doesn't have to be more of this kind of traditional term loan. This is where you can kind of get into things like venture debt. You might be on a very aggressive buy-and-build strategy, and you've managed to get the first two or three away, and it's going very well for you.

But you now want to capitalize them significantly. So you don't necessarily just want one form of finance that you can go and do it with. So you can look at more creative debt instruments in those scenarios where you can get access to maybe a significant sum of capital relative to what you're turning over from, or even having as a net margin.

But what it allows you to do is rapidly deploy that cash. And the way that the venture debt or the lenders are structuring it is that you're not having to pay back capital interest for a longer time. You may be amortizing an interest-only rate over maybe a two- three year period, and maybe there's a bullet payment at the end.

So all of a sudden, you've got a lot more flexibility in terms of that cash and how you use it and when you use it. So it's something to be super cognizant of that. If you are looking to get into it in terms of more of a buy and build, if you're going down that route, you're going to have so many different tricks in your locker. That's just one on the venture debt side of things.

But as these businesses start to trade, you can leverage different forms of financing from them, whether that's invoice or asset-oriented, or even if you want to start getting into owning certain assets or looking at kind of commercial real estate facilities. So your locker is only going to get bigger and bigger and bigger as you are in the business or start to have multiple businesses.

It's the starting point is typically the hardest. When I built my first, the hardest acquisition was the first one. And then you get equity, plus your cash, and as things compound over time, you know, the same with the business portfolio.

And, know, even to the point, as you said earlier, that you might not even, you know, there's cases where you don't even need to drum up a deposit. You can just get full finance. So you want to buy something for a couple of hundred K or a couple of million.

You might just get that without needing a deposit based on where you're trading. Yeah. That's really cool. Kieran, are there any questions that I'm not asking that I should be asking or things that you think we should be sharing?

Yeah, 100%.

Yeah, something super obvious is credit and credit scores. I haven't really touched on it. So naturally, if you're doing this for the first time, you're not going to have a business credit score to look at. Or maybe you had historic businesses in the past that maybe you finished or you've obviously then got to articulate why they finished, or they're no longer there, or they're dormant, whatever it is. But ultimately, it's coming down to the individual.

credit scores, you've got to know what that is. And there are many tools and platforms on the internet to find out what your own personal credit score is. You just want to go in eyes wide open and know that,t because if it's not good, then you're starting on a massive backwards foot.

I don't know what the technical term is in the Australian market, but sometimes in the UK market, you might have a thing called a CCJ, a County Court Judgement, say you forgot to pay a parking ticket or something and didn't realise it and you changed addresses and they've been sending that parking ticket fine to the old house for a couple of years now.

You've no idea what you've. You then go, and you go for finance, and they're like, you're right, it's terrible. And they're like, why? I don't know what to understand. We see that all the time. They didn't realise they had a CCJ or an unpaid ticket. It's not a huge amount. It might be a thousand bucks, something like that.

And so before you do anything, check your personal credit score, understand the thought.

Clear it if you can. Yeah. And you can just use, you know, AI to go away and look up wherever your location is, Canada, UK. How do I check my credit score, and how do I make sure that nothing is outstanding or getting in the way?

Yeah, exactly that. Cause yeah, you're going to need a strong personal credit score if you're doing it for the first time. Yeah.

Cool. Anything else that was obvious that we may not have mentioned it as well.

I think something on the sector side of things, again, eyes wide open, understand the sector that you're in or want to acquire. In some cases, it can be challenging. We see a lot of activity in kind of like vape shops, particularly in Canada, super popular, but not all banks are a game for it.

So just understanding. And hopefully, that's kind of where Sweep is kind of useful,l because we can be pretty quick in terms of depending on the sector, these are going to be your options. If you're looking for a dentist, the whole world is always for you. depends on the sector, it's super important as well.

Yeah, like a CBD-type business. Maybe it's easier for lenders now, but 10 years ago, it wasn't available to lend something like that.

AAAAHHHH

Yeah. Just sorry, one, one that I brought this problem to my mind as I saw it yesterday, succession stuff. So often you will see it where there's like a family in the business, like a family-run business, and the daughter or the son is coming up and wanting to just grow that business, but could expand that business.

But the person in the directorship or the ownership is the parents in some way, shape, or form. And so often, there are people having to sign up as guarantors for two facilities. So again, having those family discussions is important because the lenders need to understand that dynamic and what occurs, and naturally, unfortunately, the parents will be the elder of the two, and they might not see them as having too much serviceability from a credit point of view, depending on their age they are.

So again, being cognizant of how that succession side of things works, how does that ownership structure look at, because you're looking at things like personal guarantees and stuff like that, which again, didn't touch on that.

There are things like personal guarantee insurance. So again, that's a product that's definitely worth looking at when going through these exercises if people are uncomfortable with things like personal guarantees.

Yeah. Personal guarantees on homes and whatnot as well. Yeah. Yeah. Karen, thank you so much for coming on. It's been very eye-opening, very, very good to learn. I'm sure the audience is very wrapped about knowing that they've got options now in Oz, U, K and Canada.

So guys, there'll be a link to this in the show notes to go check out Swoop. It's a link where you can just learn a little bit of partner with you guys. They're at Swoop. So Swoop and Bob have partnered, where you guys can just go and check out that page. There'll be some information.

And then if you want to submit businesses that you want to acquire, then go for it. If you've got any questions, reach out to reach out to myself or, Swoo, or Kieran. Thanks so much for coming on. been an absolute pleasure. We might have to do another one in a year, see how you guys are traveling, and maybe even talk about some case studies that people have acquired with Swoop. Be cool.

Yeah, yeah, we'd love to chat through some case studies. That'd be great. Thanks so much for having me.

Yeah, thank you.

Thanks, everybody,y listeni, ng and I'll see you on the next one.

Cheers, guys.

Cheers.