Four Primary Financing Options

One way or another, there has to be some form of financing for an ownership transition to occur where one or more parties are putting capital at risk to make the deal happen.

D. Brown Management Profile Picture
Share
Succession: 4 Primary Deal Financing Methods.

There are four primary sources of financing and most deals will utilize a combination of these.  

  1. Seller financing where the current owner takes their money over time. This may come in the form of:
  1. Outside capital from the buyer with the most likely scenario for a significant amount of outside capital coming in from a strategic buyer.
  1. Bank financing of an ESOP.
  1. Bank financing on a term loan for buying the business. This will typically require some combination of outside capital and seller financing, along with proven financial performance, a proven management team, and all 5C’s met. 

Four Primary Financing Options
Continue building value in your business, yourself and your key team members with a good succession strategy....

Four Primary Financing Options
Continue building value in your business, yourself and your key team members with a good succession strategy....

Correlation Between Culture, Safety, Profitability, and Growth
There is a high correlation between contractors that have consistently GREAT safety records and consistently GREAT profitability, growth, morale, and talent retention.
Retirement Onboarding - Integrating Other People and Processes
Retirement Onboarding seems simple enough, but it cannot occur in a vacuum. Owners need to look at all of the stakeholders that will be affected by their decision.
Building Your Foundation as a Growing Contractor
Construction companies require strong foundations just like the projects they build. Like a building the larger it will be the stronger the foundation must be. How strong is your business foundation?