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....

Lean Principle - Pulling vs. Pushing and the Four Most Powerful Words for Improving Productivity
“What do you need?” are the four most powerful words for improving productivity, developing a team, and building engagement. "Pull-Planning" can be used way beyond building a project. The principle is the foundation for many aspects of life and business.
Inspiring Communication as a Leader
JFK used words effectively to reframe mindsets to great effect with lessons all leaders can use. What can you take away from this for your next communication with your team?
The 5th Knot - A Lesson in Never Quitting
There are few things that drive success more than simply never giving up. How far are you willing to push yourself to get what you want?