Folks are calling it a "retro deal." It's basically when buyers and sellers agree that the best thing for both parties right now, is to hop in a time machine and travel back six months into the past -- back when rates were low and multiples were hefty.
The concept is simple. Buyers and Sellers are stuck in a stalemate.
Think about it: Buyers don't want to pay 7-9% (floating) on a traditional bank loan, especially when rate hikes are showing no end in sight. And, Sellers don't want to sell their businesses right when multiples are shrinking.
So here's the win-win. The Buyer agrees to value the business using the hefty multiples from the 'glory years.' IF (and only if), the Seller agrees to take on a significant Seller Note payable at the lower interest rates that all of us miss.
It's retro. It's vintage. It's a throwback. It's whatever you want to call it. But most importantly -- it might just get your deal done and dusted.
[New]: I know of only one guy doing THIS right now...
by a lender from Baylor University - Hankamer School of Business
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