• 81% buyout • 19% seller rollover (no PG) • Zero money down • Option to call seller equity after 12 months at original multiple
Someone smart tell me why every deal shouldn’t be structured this way?
Less risk for buyer.
Less risk for lender.
Easier entry point for buyer.
Phased-in 100% buyout.
What am I missing?
No reason to ever do a 100% buyout again.
Save your cash, pay the equity injection from cash flows of the business over 12 months, have massive seller skin in the game, bank lends with less leverage.
Assuming seller will bite and lender will approve, this is eligible and all positive.
Secondly, only if the balance sheet supports the transaction can you do a business purchase on a partial buy-out with no equity. However, even though that might be allowed, many lenders will not do a deal with no equity and sellers might not do a deal without equity coming into the purchase.
Happy to discuss more. We hope to post more details shortly. Still assessing the changes. You can reach me with questions at --@----.com or here.
Reducing Ownership Interest: a. Any Person (as defined in 13 CFR###-###-#### subject to the guaranty requirements 6 months prior to the date of the loan application would continue to be subject to the requirements even if that Person has changed their ownership interest to less than 20%.