Funding for the MBO / MBI for loans

Saturday, February 13, 2010

The funding for the proposed acquisition or MBO / MBI is a general topic, but basically there are four main sources of money are taken into account. Debt of the two main sources of trade through loans guaranteed by the acquired assets and capital which can be supported from a cross between a venture capitalist (VC), which proposed the purchase of equipment or fairness in the administration secured owned by these workers. There are also scholarships and loans, which are of particular interest in the areas of development,Sales and financing through the deferred payment or "win" the interest of the seller.

It 'important to remember that money is intended to be not only the purchase price including the authorization of debt in connection with the transaction satisfied, but also requires working capital for the company after the trade, and to cover all investments required the development or restructuring of the company after the purchase. However, it is good to buy the business, to see thatHave no money to run. Then, you must work closely with its consultants and ensure that your forecasts are and that you obtain adequate funding, the company can be seen from every eventuality, you should consider, and also to meet the statutory requirements for lending activities of a company.

The money in the form of loans against property rose from the financing of a "structured" set of claims against the property byCommercial Mortgage (or a bridge loan if the transaction will be finalized shortly) or the sale and lease transactions, equipment and machinery sale and lease transactions, and borrowers, and sometimes the actions by factoring or structure discount invoice.

Provider of this type of debt financing are banks, which have a variety of financial instruments, products, and remember that a company bank account, but otherwise the banks are reluctant to finance such operations, butDiscovered.

"Structured" or "package Lenders, invoice discounters are also able to finance against property and / or machinery and equipment, and in some cases, values. While donors are crucial in many successful MBO / MBI, a limit their exposure to the general agreement on a certain percentage of the debtor, such as 150% of the loan period, which may limit the ability to raise funds from other activities.

Donor is also the only independent specialistTo cover a focus on the financing of a particular class of goods or invoice for a discount on the cost of a construction company to give the real and financial assets of machinery and equipment. Use in front of donors, which may be fully or partially, in conjunction with a number of other agents or lenders "margin" that the use of a single package the donor be important in some cases.

If you own commercial property, usually 70% ofMarket Value (OMV) can be obtained from a loan (or the use of a bridging loan and whether the funding will be needed quickly if the transaction or not) the general criteria of financial institutions, and 100% of OMV obtained ( or, if the votes were conservative) through a sale and leaseback to finance the reduction of that requirement in part outside the capital at home.

If a company is important, machinery and equipment, 70% to 100% of its value can be raised through the sale of 3 to 5 yearsLease.

An advance of up to 85% of the work that the debtor, ie the cost of such a right should be within 90 days of the credit limit, etc., exist. Some banks, taking into account the reservations by a greater amount of money available to borrowers, sometimes over 100%.

Your professional adviser or broker must be capable of an appropriate package for the financing of these types of sources to assembleTransaction. The basic information needed to establish the order, such as debt financing can be obtained for an acquisition, information on:

* The agreement rate of sales, operations or assets, the purchase price, working capital requirements for the sale and funds from other sources, such as the capital of a resume or a team responsible for purchases, donations or funding by the seller in exchange or a deferred earn out.

* The business sector,were included, the history of your activity and performance, including planning for the accounts of the last three years, with its assumptions and predictions of details of the reorganization, if you have problems.

* The management team, including a curriculum vitae and statements of financial conditions.

* The evaluation and description of the freehold or lease of real property and details of all air pollution problems o.

* Rate or, alternatively, a list of assets is not enough information on the machinesTo allow the model, age and condition, an assessment of the possession of all machinery and equipment with HP and the responsibility to hire outstanding.

To keep lists of debtors, creditors of the old list and a package for the sample sale, delivery and billing records, and lists of finished products.

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