Building relationships with debt financing partners

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March 22, 2019

by a searcher from Georgetown University in München, Deutschland

I'd love to hear your views on this:

You recruited your equity investors and are confident that you will get them to back the company you will present to them as a result of your search. But what about the debt financing - does it make sense to try and arrange that up front, as well? Local banks  often do not have the expertise to finance a transaction, and the professional backers of PE deals only do larger deals.
So how would you find the optimal partners for debt financing? And how would you build a relationship up-front?

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Reply by a searcher
from Harvard University in 1970 Walton Dr, Burlington, WA 98233, USA
David - don't forget that local lenders can also be great sources of deal flow, especially if you are doing a geographic search. I met with all of the lenders in my search area prior to issuing an LOI, and it improved deal flow as well as the competitive terms I received from the lender when I closed.
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Reply by a searcher
from The University of North Carolina at Chapel Hill in Los Angeles, CA, USA
My limited experience was reaching out to an SBIC thinking they would fund my search. I thought the meeting was useful and will 'grease the skids' when I reach out with a potential deal.
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