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BPM Helps Business Owner Build Financing Case for Buy-Out

01.01.16

Situation

A co-owner of a new, rapidly growing consumer products company signed an agreement to buy out her business partner. She was highly motivated, but could not afford to do so without the bank’s funding commitment. The seller’s terms were full payment within 60 days from closing. A local bank committed to the deal, but almost immediately withdrew. The buyer was left with no funding, and the selling partner was ready to back out under the 60-day payment clause. In addition, the CFO went out on maternity leave.

How We Helped

First, BPM prepared a valuation of the company, and helped buyer and seller reach a mutually agreed upon price. Second, with our own files, documents and forecasts, we quickly compiled a complete electronic loan package, which we would instantly send to interest lenders. Then, using the power of personal connections, we contacted 12 different banks, two non-profit lenders, several government loan program, a credit union and several other non-traditional lenders seeking funding for the buy-out. Most lenders said that they could not fund the transaction, due to the borrower’s lack of sufficient collateral.

Results

We built a strong business case for lenders and met with those who were interested. By the end of the process, we secured competing loan commitments from five different lenders. The buyer completed the transaction, and now owns 100% of a successful, growing business.