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.

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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....

Leadership Combinations and States of Market Growth
There is a beautiful tension in leadership teams that is required for growth. That tension shifts with different stages of a market's growth and must be integrated with the contractor's stage of growth as a company.
Changes - Impacts Beyond the Direct Costs
Contractors don't typically see the full negative impact of changes and, therefore, don’t put the right level of resources into their management.
Project Delivery - Lease Leaseback
Project Owners typically manage the financing of the project. In certain circumstances this does not always make sense, which is where Lease-Leaseback or Build-to-Suit project delivery methods come in.