Funding Alternatives

March 08, 2022

by a searcher from Utah State University in Palmyra, NY 14522, USA

I have 2 deals that are past LOI and working on the DD. I have the bank doing underwriting/DD. One week away from closing, they said that I would need to pay off my current business loans in my existing business before they could fund it, so the business could start clean - even though the monthly payments are only $###-###-#### Is this standard? Anyone have funding sources where this is not required?

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

If I am reading your comment right it sounds like you need to payoff other debt before funding this new business acquisition?Are you buying the new business in your existing company name?A new lender can do purchase money financing on the new business acquisition.Paying off your existing debts does not always have to be a requirement. It may depend on the lender and the cash flow situation.We have done plenty of deals where the existing debt stays in place and we provide additional funding for an acquisition.The challenge would be figuring out if it is an underwriting issue or a bank preference issue.Happy to discuss your specific situation at anytime.You can reach me at redacted you.

Reply by a lender
from McGill University in Greenwich, CT, USA

Hey there - my firm, Libertas Funding, funds acquisitions with unsecured, non-dilutive revenue-based financing options. We underwrite a target company's financials, allowing you to leverage the target's cashflows in your acquisition. We don't take any assets into consideration, no equity and no PG required. We wouldn't require you to payoff your current business loans either. Email me at redacted if you would like to discuss. Thanks!

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