How do we finance the acquisition?
We have a range of financing options available for deals, tailoring the structure on a case-by-case basis.
These options include traditional leveraged buyout (LBO) structures, a blend of debt and equity, seller notes, Small Business Administration (SBA) loans, asset lending, and 100% annuity deal structures.
We customize the approach to suit the unique characteristics of each situation. Specifically:
1.Traditional LBO Structure
2.Debt and Equity Combination with Seller Notes
3.SBA Loan
4.Asset based Lending
5.All-Cash Purchase
6.100% Annuity Deal Structure
This diversified toolkit allows us to adapt to varying circumstances, optimizing the financial structure for successful deal execution.
Speed: The duration required for a standard business sale typically ranges from 4 to 18 months, contingent upon factors such as the business's size and financial structure. Conversely, annuity deals, which can be done in less than 30 days.
Stable Income Stream: An annuity deal often involves periodic payments to the seller, providing a steady and reliable income stream over time. This can be particularly advantageous for individuals seeking consistent cash flow post-sale.
Mitigation of Tax Impact: Structuring the deal with annuity payments can help in managing tax liabilities. By spreading the income over time, sellers may potentially reduce the immediate tax impact associated with a lump-sum payment.
Risk Mitigation: Annuity payments can act as a risk mitigation strategy for sellers, ensuring a more predictable financial future. This structure can protect against market fluctuations and economic uncertainties.
Smooth Transition: For sellers looking to transition out of the business gradually, annuity payments allow for a phased exit. This can be beneficial for those who wish to stay involved in the business during the transition period.
Buyer-Seller Alignment: Annuity deals often align the interests of buyers and sellers. By tying a portion of the purchase price to the future performance of the business, both parties have a shared interest in ensuring the company's continued success.
Retirement Planning: For sellers entering retirement, annuity payments can serve as a valuable component of retirement planning, offering a dependable income source beyond the sale of the business.
Flexibility in Payment Terms: Annuity deals provide flexibility in negotiating payment terms. Sellers and buyers can customize the payment schedule to align with the unique needs and circumstances of both parties.
Potential for Higher Total Payout: Depending on the agreed-upon terms, the total payout over the annuity period might exceed the lump sum offered upfront. This can be advantageous for the seller, especially if the business continues to perform well.
Annuity Deal Structure
Selling your business through an annuity deal structure can offer several benefits, here are some advantages:
Let's have a stress-free selling experience
If you're interested in hearing more about the way we work, have a business proposal, or got any queries, we'd love to hear from you.
