Using the company's existing banking relationships to finance the acquisition

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by a searcher from University of Virginia-Darden - Darden School of Business
in New York, NY, USA

1yr ago

Using the company's existing banking relationships to finance the acquisition

Currently looking into a business with revenue streams from creditworthy customers and solid existing banking relationships.

There are some interesting non-SBA options, from traditional lenders to SBIC. I would like to get the perspectives of others with experience engaging with a company's existing banking relationships to finance the acquisition of the company.

As a side note, I am also open to connect with more SBIC lenders.

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reply by an intermediary 1yr ago
from University of Houston in Houston, TX, USA

I had a seller once where his bank and lender were the same. The buyer tried working with them but couldn't get better terms versus other financing options that buyer had on the table.

reply by a lender 1yr ago
from Northwestern University in Chicago, IL, USA

Absolutely you should have the incumbent bank in your consideration set, and they'll be motivated to not lose the asset. You might also pick up on a detail or two from those already experienced with underwriting the exact company you're looking to acquire.

Of course, more likely than not the incumbent will balk if you're looking to maximize leverage. What was a fit for the seller's cap structure and ambitions is not going to match yours.