Commercial Finance
Management Buy Out, Company Acquisition or Cash Out Funding
If you are looking for funding to either purchase a competitor, effect a Management Buyout or simply extract Cash through a Cash Out deal then we can advise you what is likely to be available from funders in respect of both Asset Backed Lending or Cash Flow Lending.
Funders will look at both the business’ current and projected financial performance, and also at the finances of the buyers and potentially its Management Team. This may include credit histories, net worth, and the amount of management equity put up by each individual.
The key factors that will need highlighting are:
- The ability of the new management team to run the business and continue it’s performance trajectory
- That the Cash Flow is sustainable and can service the debt.
Autograph can do an assessment of the balance sheet of the existing company and any target and identify what funds can be raised against the business assets such as Property, Plant and Machinery and the debtor book. This will enable a management team to understand what gap needs financing either through a Cash Flow Loan, injection of capital or deferred consideration.
FACTS
In the case of secured business loans for MBOs, Acquisition or Cash Out:
the borrower can pledge business assets such as property, machinery, the debtor book and/or personal assets, as security. This can be a better route for management teams who need to raise a greater level of funding and because the provision of security reduces the level of risk for the lender, they will also generally lend at a cheaper rate.