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. 

Succession
Continue building value in your business, yourself and your key team members with a good succession strategy....

Succession
Continue building value in your business, yourself and your key team members with a good succession strategy....

Incentive Compensation for Contractors - Audience Question: Starting?
When getting started with a plan, it is usually better to start with something more general and the distribution criteria being weighted more heavily toward management subjectivity.
Urgent vs Important
Every person on the planet has the same 24 hours in a day - it’s how we use those 24 hours that differentiates us. What’s truly important that you can do today, this week and this month that will move your life forward in a meaningful way.
Communicating as a Leader
Leadership is about the ability to influence and align people. And that is largely about effective communication and consistent actions.