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....

Technology Integration - Critical Inflection Points and Streamlining Workflows
Construction technology can no longer be treated like a “Project” with a beginning, middle, and end to the implementation. There are now hundreds of specialized technology tools that can be implemented by contractors and each add individual value.
Contractor Exit Strategy 4 of 6: Merger with a Similar Contractor
Contractor Exit Strategy 4 of 6: Merging with a contractor that has a complementary market position and management team can be both a great exit strategy as well as an effective growth strategy.
Leveraging Geographic Expansion for Leadership Development
Geographic expansion is impacting all contractors whether it is major customers pulling them into new markets, new competition coming into their “hometown” or as a proactive strategic growth move by the contractor.