OVERVIEW – Information on acquisition finance solutions and challenges revolving around the business purchase decision
Business purchase decisions. Knock Knock – Who’s There?
Opportunity has arrived! The ability to control or buy a business requires though, acquisition finance funding. Buying a business with the right financing in place helps guarantee the success that comes with sales and profit growth, and businesses in the SME segment of the economy rarely have all the ‘ cash ‘ they need to buy a company . The solutions? Let’s dig in.
Clients we meet have varied reasons to buy a business. In some cases it might simply be the purchase of an existing franchise – rightfully or wrongfully some consider that decision as ‘ buying a job ‘. We’ll let the pundits weigh in on that argument.
In other cases it allows the owner to speed up growth plans, expand into the U.S. or internationally, or to have the ability to capitalize on special technologies. All of those translate into the need to have a ‘ plan’ to show that financing will allow those sales and profits.
One myth of acquisition finance is that 100% financing is available to purchasers of a business. That is very, very rarely the case. Another myth is that business purchases are geared towards specific industries, when in fact any business can be acquired. In the SME sector it is particularly hard to finance the purchase of a service business as there are rarely assets to support the transaction.
In numerous cases the type of financing you need to buy a business might simply be a temporary ‘ bridge ‘ solution to a longer term ‘ full time ‘ finance solution. That could be termed ‘ transition’ financing.
Here it’s important to ‘ button hole ‘ the types of financing you will need for your acquisition. That comes in various forms:
Cash flow term loans
Other areas to be considered include the amount of debt that is already in the company that you are looking to acquire. In many cases this debt or other facilities will need to be ‘ taken out’ or reworked in some manner. Many transaction we see have some form of ‘ seller finance’ involved, having the owner participate in the financing by taking some form of a ‘ note’.
The actual financial solutions that will allow you to complete proper financing include:
Asset based loans
Bank Term Loans
Government Guaranteed Loans
Unsecured cash flow loans
Non bank asset based lines of credit
A/R and Inventory Financing
Sale leasebacks of unencumbered assets
If you’re looking to ‘ cash in’ on a business purchase opportunity seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with the right mix of financing to accomplish your goals.
7 Park Avenue Financial :
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 – Completed in excess of 100 Million $ of financing for Canadian corporations . Info /Contact :
7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS PURCHASE FINANCING EXPERTISE
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Office = 905 829 2653
‘ Canadian Business Financing With The Intelligent Use Of Experience ‘
ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
7 Park Avenue Financial
Canadian Business Financing