Executives are gaining confidence and borrowing more to invest in their businesses after the November election, a Long Island lending executive said Tuesday.
The average size of loans to small- and medium-sized businesses has grown from $45,000 last year to $50,000 or $55,000, said Ted Theodoropoulos, chief operating officer at Bohemia-based business lender National Business Capital. His remarks came during a panel discussion of the Trump administration’s impact on mergers and acquisitions, held at Marriott’s Courtyard Long Island MacArthur Airport in Ronkonkoma.
“They’re confident to take on the additional debt,” said Theodoropoulos, who advised business owners to “build a strong business” to advance the chances of a favorable M&A deal.
Speaking before an audience of about 90, another panelist, Robert Pospischil, said that acquirers see Long Island as “a lucrative place to expand.”
Pospischil, president of Holtsville-based Bissett Nursery and Bissett Equipment, said that SiteOne Landscape Supply LLC, a publicly traded Georgia company that acquired the Bissett companies in 2016, has a full-time M&A team. When dealing with seasoned M&A professionals, he said, smaller companies need to prepare.
“You don’t want to go into a gunfight with a knife,” he said. “You don’t want to leave money on the table. Be patient. Don’t be in a hurry. Do your homework.”
One of the biggest mistakes made by business owners is to fail to assess the worth of their businesses, said another panelist, Gregg Schor, chief executive of Ronkonkoma-based Protegrity Advisors LLC, which sponsored the event.
“They make the decision to sell that’s disconnected from the business,” he said of some owners.
Moderator Joseph Campolo, managing partner at Ronkonkoma law firm Campolo, Middleton & McCormick LLP, said that many people are “obsessed with their home’s value” but don’t know what their business is worth.
Yogesh Gupta, president and chief executive of Bedford, Massachusetts-based Progress Software Inc., said that a failed acquisition helped him prepare for a successful one when he led Mineola-based Fatwire Software. The veteran software executive said that a public company approached Fatwire about an acquisition in 2008. That deal fell apart when the prospective acquirer itself was bought.
“A bigger fish bought the middle fish that was trying to buy us,” he said.
A few years later, when EMC Corp. kicked the tires of Fatwire, Gupta said, the company was able to hand over data and documents because Fatwire never abandoned the M&A process. Within weeks of EMC’s expression of interest, he said, the company’s M&A advisers flushed out the eventual buyer, database giant Oracle Corp. That deal was announced in June 2011.