MSP question of the week: How can you buy another managed service provider (MSP) with no money down?

from the SMB Community Podcast

Jame and Amy discuss different strategies and options for acquiring a book of business from retiring or exiting MSP owners.

One technique for buying a book of business with no money down: One technique is to pay the seller a percentage of the revenues from the transferred clients for a two-year period, without any upfront payment. This requires the seller to help with the transition and endorsement of the new MSP.

Another option for financing an acquisition: Another option is to use the Small Business Administration (SBA) loan program, which can lend up to 100% of the funds needed for an acquisition, based on the target company’s assets and cash flow. This requires no money down from the buyer, but the loan has to be repaid.

The benefits and opportunities of buying another MSP: Buying another MSP can be a growth strategy for existing MSPs, as it can increase their client base, revenue, and market share. There are many opportunities to buy MSPs from owners who want to retire or exit the industry, and who are willing to sell their books of business on reasonable terms.

Have a listen to this MSP question of the week.

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