In a business acquisition, you are taking over an existing business from another entrepreneur. A business acquisition gives you the opportunity to step directly into an established business. This allows you to grow your business quickly and strengthen your position in the market.
We give you 4 reasons to enlist the help of an independent financing advisor in the process.
1. Best conditions
Digitalization at banks has led to a shift from personal advice to independent advisers. Parties such as Financieringsgilde have a national network of expert advisers who are familiar with the local situation.
They are 100% independent of banks and other lenders, therefore they can ensure that you get the best financing for a business acquisition. They research all options in the lender market to get the best financing terms for you. They also compare with you more than 100 products. Even those from your own bank.
Greatest chance of success
Financing advisors have contact with all banking institutions, as well as alternative lenders. For an acquisition financing, you are often less able to go to a bank. A bank wants limited risk and therefore requires a lot of collateral. With a business acquisition, there is often only limited security to give and there is a large blank part in the financing that is not covered.
Financing a minority stake can be especially challenging, as the entrepreneur in question will have limited control and thus cannot simply take dividends.
Financing memorandum
For acquisition financing, there are a number of lenders who finance clients based on cash flow. In exchange for the limited collateral, they do charge higher interest rates. These are non-bank lenders that often take a bit more risk than banks. The financing advisor then writes a financing memorandum that provides the lender with all the important information for the evaluation. With this substantiation, your financing application is more likely to be accepted.
Advance advice
The financing advisor will look at the feasibility of the application from the beginning and will coordinate with the bookkeeper or accountant. So you receive advice in advance based on the current annual figures and the accountant's forecast. This way, you know your options as an entrepreneur and whether you can take over the business of your choice.
3. Advantage
A low interest rate is obviously attractive, and a low monthly cost can be important to a successful acquisition. Together with the financing advisor, it is also important to weigh other issues that you may be quick to overlook. Consider the collateral and additional conditions a lender sets. For example, each lender has a different term, and this can make a big difference in the amount you ultimately have to repay.
Negotiate
Co-banking other businesses or making you privately responsible for financing is also an important part. An independent adviser always makes a comparison between your home bank and other lenders. In this way, you will receive the most competitive terms at both your home bank and other banks. With a good application, lenders compete with each other and it is possible to negotiate terms such as a discount on closing costs, a lower interest rate, or dropping collateral. The financing advisor is happy to take care of that negotiation.
No hassle 4.
With your approval, a financing advisor takes control of the financing process. This takes a lot of work and time off your hands, allowing you as an entrepreneur to focus on your core business. You don't have to deal with gathering the necessary information, writing a financing memorandum and liaising with lenders.
Collaboration
The financing advisor knows from experience and contacts with lenders what documents are needed to successfully conclude a financing agreement. The cooperation with your accountant or bookkeeper is very important here because together they draw up a forecast and prepare the internal or interim figures.
Fast and efficient
The financing memorandum is written by the adviser. By doing so, he informs the lenders and increases the chances of success. Through the financing memorandum, the lender immediately has all the relevant information to make a decision. Thus, the rest of the process immediately runs efficiently and you have arranged your financing faster.
Contact with lenders
The financing advisor will also liaise with lenders on your behalf. Often the lender will want to have an introductory meeting with you, but the other contact moments and conversations the adviser can have with the lenders independently on your behalf. The adviser has regular contacts at the lenders and they trust the adviser's expertise and knowledge. This makes the application for your financing run smoothly and faster than if you were to do it alone.
Free quick scan
Together with Financieringsgilde's independent advisers, you will discover how to make the right choice between different financing options, what the advantages and disadvantages are and how to obtain the best terms.
Financing Guild has a wide range of lenders, so you can turn to them for all investments. Whether you borrow money from your home bank or from one of the alternative providers in the market, they will arrange any SME financing.
Do the free quick scan now to gain insight into the feasibility of your financing plans!
