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....

The Best Choice
Whether it is a decision about your best strategy or the best production plan on a project learning how to make effective choices is critical.
Effectively Leveraging Trainers, Coaches, and Mentors
Contracting is a high-risk sport and the training of yourself, your managers and your craft labor should be as rigorous as a professional sports team. We are facing a massive shortage of critical talent yet most spend very little on talent development.
Contractors Business Model
There will never be enough resources to take advantage of every opportunity or solve every problem in a construction business. Contractors must relentlessly prioritize allocation of resources and alignment around the biggest bottleneck in the business.