Curt Neider bought a $1M medical billing shop with 80/10/10 SBA structure

The Setup Curt Neider was not a lifelong searcher. He built and sold a commercial fragrance service business in Hawaii, did a stint in general contracting, and spent time in private equity before deciding to own the cap table himself. He wanted a services business with recurring revenue, sticky customers, and a defensible niche. Medical billing hit all three. Healthcare revenue cycle management (RCM) is a grind that providers hate doing in-house, contracts run month-to-month in theory but stick for years in practice, and a niche focus raises switching costs further. The target was Illuminate Billing Advocates, a boutique RCM firm serving substance abuse and mental health providers. Roughly $1M in annual revenue. Small enough for an SBA-financeable check. Specialized enough that generalist competitors could not poach clients on price alone. The Deal Closed December 2020. Approximately 3x multiple, putting enterprise value near $3M. Capital stack: - 80% SBA 7(a) loan - 10% seller note - 10% equity injection (Curt plus partner Mike Hansen) - Separate SBA Express line of credit for working capital The working capital structure is the quiet move here. Most first-time buyers roll working capital into the term loan and pay amortizing interest on cash they are not using. Curt split it out. Draw when you need it, pay interest only on what is drawn, keep the term loan clean. Mike Hansen, a CPA, came in during diligence and stayed as operating partner. Finance skills in a billing business are not optional; claims aging, payer mix, and DSO are the entire game. First 100 Days Before closing, Curt earned the Certified Professional Biller credential. He did not want to be the CEO who nods while the billers talk. In a tribal-knowledge business, credibility with the staff matters more than any deck. Early operating focus was not sales. It was claims hygiene. In RCM, revenue leaks when claims disappear into payer black holes, sit past timely-filing windows, or get denied without follow-up. Curt tightened the queue management, the denial workflow, and the claims tracking before he spent a dollar on marketing. Fix the bucket before pouring more water in. Operating Lessons - Split working capital into a separate revolving line. Lower blended cost of capital, more flexibility, cleaner P&L on the term debt. - Use SBA-specialist lenders, not your neighborhood bank. Generalist lenders stall on 7(a) structure questions that specialists answer in an afternoon. - Get operationally licensed in your own industry. The CPB cert cost a weekend of study and bought months of staff trust. - Pick a niche with an altruistic kicker. Substance abuse and mental health billing is not glamorous, but staff retention and client loyalty run higher when the work feels like it matters. - Bring in a partner who fills your gaps. Curt is operator-builder; Mike is numbers. In RCM the numbers person is not optional. Where They Are Now