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 - Kaizen (Every Detail Matters)
As contractors build their businesses, it is important to look at every detail from the first meeting with a potential customer through winning and building the project. This same attention to detail also applies to supporting operations and talent.
Four Stages of Learning a New Skill
It is impossible for any of us to know what we don’t know. This is the stage where we all start when learning a new skill. Understanding all four stages is invaluable for self-development and especially so for the training and development of others.
Leading vs Lagging
Clearly defining the outcome you want in clearly measurable terms is critically important so that you and everyone else knows exactly what winning looks like. As challenging as defining clear measurable outcomes is; that is the easiest part.