• Twitter
  • LinkedIn
  • Facebook
  • Instagram
  • Youtube
Login  | Call now: (800) 780-7133
Kapitus
  • Problems We Solve
  • Products We Offer
  • Partner With Us
  • Blog
  • APPLY NOW
  • Search
  • Menu Menu
Congress M&A Small Business Bill

Small Business M&A Act Could Make Things Easier for Main Street Businesses

January 18, 2022/in Accounting & Taxes, Tax Legislation /by Vince Calio

Small Main Street businesses may find it easier to engage in crucial M&A activity if Congress can get its act together this year. A remarkably bi-partisan bill was reintroduced in January that would allow small business M&A advisors who are not registered as “broker-dealers” with the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA) to advise small business owners seeking to purchase or sell their businesses.

Less Expensive M&A Advice

Small, non-complex businesses such as auto mechanic shops or plumbing operations who are seeking to expand through acquisition or mergers have long complained about having to pay exorbitant fees to SEC- and FINRA-certified brokers who are probably over-qualified to advise on such small transactions. 

Why the Bill Matters

This bill would allow smaller broker-dealers who specialize in analyzing local markets to advise small businesses, rather than forcing Main Street businesses to seek advice from expensive, large financial institutions that may not even consider small business deals to be lucrative enough to spend time on.

Both a broker-dealer and M&A advisor will take a percentage of a deal’s total value as a fee. The M&A advisor, however, typically charges additional fees for more in-depth research such as finding out the national deal size per industry or global accounting methods that can be used to valuate the deal. These are services, however, that an auto body shop seeking to buy its competitor across town most likely doesn’t need. A broker, however, will research the local area and come up with a list of acquisition targets and a deal valuation that fits the local market. 

Additionally, registering with the SEC and FINRA is a long, costly process, especially for smaller broker-dealers, who would have to pass that cost onto its clients. 

“Whether they want to buy new ventures, sell their businesses or retire, small business owners depend on M&A brokers to help them navigate these changes,” said Kennedy in a public statement. “We need to ensure that Main Street entrepreneurs have consistent access to financial services so that America’s small businesses—and the jobs that depend on them—can continue to thrive.”  

Bi-Partisan Support

Senator John Kennedy (R-LA) introduced the Small Business Mergers, Acquisitions, Sales and Brokerage Simplification Act, a bill that is nearly identical to the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act, a bi-partisan bill that was introduced in the House in 2019 by Reps. Bill Huizenga (R-MI) and Brian Higgins (D-NY). 

The latter bill was rare in that it received 100% bi-partisan support – the bill passed the House in 2018 with a 426-0 vote but was never voted upon in the Senate. Later in the session, the House attached the bill to the Jobs and Investor Confidence Act of 2018. Neither bill was ever voted upon by the Senate, which was wrestling with the Tax Cuts and Jobs Act of 2018 (which was eventually passed) and other partisan battles at the time.

The bill is currently being debated in the Senate Finance Committee. Once again, however, Congress is in the midst of debating partisan issues and bills, including President Biden’s highly contested Build Back Better Act, and it remains to be seen whether the M&A bill will get lost in the shuffle before the current 117th session of Congress ends at the beginning of 2023.

M&A Activity Continuing to Increase

The bill, if passed, would affect millions of small business owners seeking to sell their business or acquire another. It’s no secret that the COVID-19 pandemic has forced small business owners to rethink their operations. Hiring and retaining good employees, remote work becoming the norm, spikes in inflation and supply chain disruptions have threatened the very survival of many small businesses (9.4 million small businesses were forced to close in 2020).

According to Bloomberg research, US M&A activity hit a record of nearly $5 trillion in 2021. Many small business owners have sought to merge or acquire a competing or complementary business to survive, or looked to sell their business and retire. Also, financing a merger or acquisition has been less expensive due to a historically low federal funds overnight rate, but that could change as the Federal Reserve has openly said it will seek to hike the overnight rate to fight inflation. 

Other Legislation – Bill Watch 2022

There are dozens of pieces of legislation on the table in this session of Congress, such as the 7(a) Loan Agent Transparency Act and the Small Business Development Center Cyber Training Act that could dramatically affect the way small businesses operate and gain financing. Kapitus will examine which pieces of legislation could affect you the most in future articles. 

https://kapitus.com/wp-content/uploads/MA-Act-feature-photo.jpg 1400 2100 Vince Calio https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Vince Calio2022-01-18 17:50:272022-05-11 20:58:04Small Business M&A Act Could Make Things Easier for Main Street Businesses

LATEST FROM KAPITUS

  • To Rent, To Lease or To Buy:  Obtaining Expensive Equipment for Your Business
  • What Type of Financing is Best for Your Small Business?
  • Essential File Management Tips and Trends
  • Should You Take Out a Business Loan? Consider this Checklist
  • How to Strengthen Your Small Business’ Company Culture

Subscribe To Our Blog For More Tips On How To Grow Your Business

Categories

  • Accounting & Taxes
  • Business Expansion
  • Business Loans
  • Business Productivity
  • Business Productivity
  • Cash Flow Management
  • Claim Your Corner of the Internet
  • Company News
  • Featured Stories
  • Financing
  • Human Resources
  • Industry Center
  • Leadership
  • Legal
  • Living Your Best SBO Life
  • Making Her Mark – Influential Women Business Owners
  • Monthly Must Reads
  • News
  • Operations
  • Raising Capital
  • Recruitment
  • Risk Management
  • Sales and Marketing
  • Tax Center
  • Tax Legislation
  • Technology
  • Technology Center
  • Uncategorized

About Us

  • Media Center
  • Team
  • Careers
  • Events
  • Success Stories
  • The Kapitus Difference
  • Developer Documentation
  • Blog

Products

  • Revenue Based Financing
  • Helix® Healthcare Financing
  • Business Loans
  • SBA Loans
  • Line of Credit
  • Invoice Factoring
  • Equipment Financing
  • Purchase Order Financing
  • Concierge Services

Contact Us

  • (800) 780-7133
  • Email Us

Signup For Our Newsletter

[email protected] Kapitus, LLC or its affiliates. All rights reserved. Kapitus, LLC, Kapitus.com, and the Kapitus logo are registered trademarks of Kapitus, Inc. or its affiliates. | Loans made in California are issued by Strategic Funding Source, Inc. dba Kapitus, pursuant to California Finance Lenders License No. 603-G807.
Sitemap | Terms & Conditions | Privacy Policy
  • Twitter
  • LinkedIn
  • Facebook
  • Instagram
  • Youtube
Scroll to top
  • Whether you want to learn more about our financing options, are interested in becoming a partner or just have a general question, we’re here to help! Simply fill out the form below and we’ll get it directly into the inbox of the right person.

Step 1 of 4 - Tell us about you

25%
  • Sign up for the Kapitus Partner Program!

  • Sign up for the Kapitus Partner Program!

  • Sign up for the Kapitus Partner Program!

  • Sign up for the Kapitus Partner Program!

Step 1 of 10 - TELL US ABOUT YOUR PRIMARY FINANCING NEED

10%
  • Find the right financing product for you.

    Answer a few questions and we’ll match you with the best product based on your needs and current situations.

  • 1. Answer a few questions. You let us know some basic information about your financing needs, so we can find a match.
    2. See your financing matches. You'll get matched with up to four financing options based on your answers.
    3. Apply for financing. You can apply for all of your financing options by completing one simple application and providing a few documents.
    4. Get an Advisor: You have the option to be assigned a financing specialist to help guide you through the application process.
    If you are looking to determine the best financing option for you, our matching tool streamlines the process and arms you with information that you can use before you apply. To match you with your best options, we ask you to answer a series of basic questions about your existing and future needs, current financial health, and your financing preferences – including amount to be financed, ideal terms and financing urgency. Our system then finds you up to four financing options to fit your needs. Once you’re matched, you can expect to be contacted by one of our financing specialists to help you navigate the application and selection processes.
  • Find your financing match


  • Each financing product has its own minimum and maximum requirements around the amount of money that can be acquired through that option.
  • Find your financing match



    • Business Accountants
    • Marketing & PR Agencies
    • Commercial Cleaning Companies
    • Printers
    • Human Resource & Payroll Firms
    • Office Supplies Organizations
    • Salons/Spas
    • Gyms & Other Workout Studios
    • Pet Services Companies
    • Personal Accountants
    • Home Cleaning Companies
    • Residential Landscaping
  • There are financing options created to meet the specific needs of particular industries.
  • Find your financing match

  • Thank you for reaching out to Kapitus. Unfortunately, our financing products are only available for existing businesses and we will not be able to help you at this time.


  • The amount of time your business has been in operation is a deciding factor in the type of financing options available to you.
  • Find your financing match


  • Each financing product has its own minimum requirement for the amount of revenue being brought into a business on either a monthly or an annual basis. In addition, your monthly and/or annual revenue can dictate the length and term on your financing option.
  • Find your financing match


  • Each financing product offers different payback lengths and terms.
  • Find your financing match


  • Each financing product has different paperwork and underwriting processes. As a result, the amount of time it takes to get approved for one type of financing over another can vary significantly.
  • Find your financing match

  • Find your financing match


  • There are financing options for every credit type, however your personal credit score will determine your eligibility for each financing type.
  • We’re finding your match