Investors & Lenders How are raising rates changing your funding criteria?

searcher profile

October 03, 2022

by a searcher from University of South Carolina - Darla Moore School of Business in Great Falls, VA, USA

Hello, folks I have been speaking with some searchers and funders about the impact of rising rates and economic uncertainty on search acquisitions. I'm hearing about tighter purse strings, lower valuation asks, and increased focus on QoE.

Is anyone here changing their approach to funding?

Also, would any funders be interested in coming on my podcast, Beyond8Figures.com, to discuss what changes they're making? We can go into the areas you're seeing as important to ensure the protection of your funding and what searchers can do to make you more confident of their success with your money.

1
6
145
Replies
6
commentor profile
Reply by a searcher
from Pepperdine University in Boise, ID, USA
Definitely seeing that on anything construction related. I have a $1mm+ EBIDTA deal under LOI for 2.5x, that would normally be a 3x+ all day long. Some lenders I have spoken with are also approaching these deals more conservatively, requiring higher seller carry and equity injection.
commentor profile
Reply by a searcher
from University of the Pacific in Charlotte, NC, USA
Thanks for sharing. I believe we are going to experience similar trends across most industries. The higher cost of capital will impact everyone.
commentor profile
+4 more replies.
Join the discussion