Treatment of Bank Debt on the Cap Table?

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January 18, 2026

by a searcher from Frankfurt School of Finance & Management gGmbH in Frankfurt am Main, Deutschland

Hi, how do you or your investor treat Bankdebt on the cap table which was used to acquire the company, debt is at Holdco level. 1. Is all debt/loans on the company which is somewhat enabled by the equity the investor brings in part of investor equity share 2. Is it considered fully owned by the searcher/operator since he or she is MD 3. Is a split fairer since its enabled by the equity of investor but the MD is the one facing the bank and being subject to liability if there is misconduct. How does this change with bankloans and financial programs from government banks supporting succession of SMEs. I might want to add that its in the context of a self funded search or independent sponsor model.
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Reply by a searcher
from Dartmouth College in Garden Grove, CA, USA
Debt is at the company level and not part of the cap table. It is not “owned” by the searcher, even if they are MD or provide guarantees. Personal liability is a credit and governance issue, typically addressed through equity and comp, not by reallocating debt economics. Government-backed SME programs may improve terms but do not change this.
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Reply by an admin
from Massachusetts Institute of Technology in Portland, OR, USA
^redacted might be able to help ^redacted‌ with Bankdebt on the Cap Table.
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