Buyout and LBO Financing Archives - The Small Business Buyer

Investment Banking Myths and Small Business Buyers

by Roscoe | Dec 22, 2015 | Buyout and LBO Financing | 0 |

One of the reasons I stuck with small business buying is that big business buying didn’t make a lot of sense to me. First of all there is competition and the competition comes from big money players in private equity. So these guys are at the top of the food chain and ever since the 1990’s they have grown in numbers like rabbits. So there is more institutional money available to chase deals. They chase deals that are big… usually. Lately they reach down to our level but that won’t get them the return they need.

Cash Flow Loans To Buy A Business

by Roscoe | Nov 8, 2015 | Buyout and LBO Financing | 0 |

Does anyone really know what a cash flow loan is? When I work with students I teach how to procure loans on an asset based basis. You need assets for an asset based loan. But a cash flow loan is theoretically different.

Small Company Buys Larger Distressed Company – A Lender’s Case Study

by Roscoe | Oct 31, 2015 | Buyout and LBO Financing, Distressed Company Acquisitions | 0 |

I am pleased to present this lender’s case study which was submitted to me by Donald Rudnik, whose full contact info is listed at the bottom of this post. This is written from the lender’s viewpoint and recounts the buyout of a bigger company by a smaller company, both underperforming.

Non-Recourse v Recourse Financing

by Roscoe | Sep 28, 2015 | Buyout and LBO Financing | 0 |

Typically a non-recourse loan is one in which the lender looks to the company to pay the loan and cannot go back to collect from the principal. Recourse financing is one in which they can go back and collect from the principal(s). Thus the lenders may have “recourse” to go against whoever guaranteed the loan which is generally one or more of the principals of the company. This concept of recourse is what we call a “personal guarantee”.

Buy a Business With Bad Credit – A Few Things You Should Know

by Roscoe | Sep 25, 2015 | Buyout and LBO Financing, How To Raise Capital | 0 |

I have had folks ask me over the years about how to deal with bad credit when buying a business. In fact what can motivate buyers to buy a business is bad credit.

Buying A Company With Bank Financing

by Roscoe | Feb 19, 2012 | Buyout and LBO Financing | 0 |

One of my subscribers has asked a couple of questions. Subscriber questions are rife with great ideas to write about so I will summarize it since everyone should hear it. The questions were twofold 1).how likely is it that the...

401k to Buy a Business – Not

by Roscoe | Oct 13, 2009 | Buyout and LBO Financing | 0 |

Of all the bonehead ideas in the world using your 401k money to put a down payment on the business is the stupidest. Yet the mainstream sites and programs to put you into this mess abound. It is much the same thing as leveraging...

Financing a Small Buyout

by Roscoe | Apr 2, 2008 | Buyout and LBO Financing | 0 |

Buyers of Small Businesses have one major advantage. Their deals are (relatively) hard to finance. This makes the competition that much less. I cannot tell you how many deals I have passed on only to find that the deal is still...