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As business conditions induce financial distress, business owners will find a new set of rules by which to play.
With banks tightening credit, higher risk sources of capital may deserve consideration. A leveraged recapitalization is an alternative for unlocking illiquid wealth in private companies.
When appropriate, managers can become owners through an MBO.
EBITDA multiples are quick and convenient to calculate, but these attributes are precisely its downfall. Understanding the trigger points of financial covenants may head off future problems. Although few and far between, trusted advisors are worthy of emulation.
Will increasing the top capital gains tax rate harm sellers of businesses? New technology has changed corporate finance, but has the human element been lost?
Independent directors can be a positive asset for private, family-owned businesses.
Do your homework and ask the right questions before deciding on a private equity firm. Creating competition among multiple bidders results in a higher value and
Measuring the adequacy of operating earnings against invested capital.
Taking another look at ESOP's.
Don’t mistake a lender’s decision as an endorsement or critism of an investment decision.
Understanding how risk ratings work may give you an insight on how banks perceive your company.
Creating shareholder value from an aquisition requires restraint in consideration of synergies.
Growing private companies need more from their CFOs than accounting precision.
Strategic value is only realizable under specific circumstances. Contrary to popular opinion, an employee stock ownership plan is not a financial panacea.
Adopting Economic Value Added (EVA) concepts by smaller and middle market companies could help prevent unwise business decisions. New SEC regulations don't solve any problems. How best to finance the equipment your company needs usually centers around the question of leasing or conventional debt. Unfortunately, leases are often misunderstood.
Representations and warranties can have a significant effect on the purchase price of your business.
In a good or bad economy, a quality management can make the difference.
As major financial institutions are caught in a vicious cycle of deleveraging, credit is contracting. Understanding and learning how to use middle market investment banking services could help your company.
If you encounter the bank’s Special Assets Group (SAG), what should you expect and how should you respond?
Banks have significantly curbed lending based on cash flow; now companies are turning to junior secured debt as an alternative. With a possible slow down in the economy coming, the groundwork could be laid for rapidly mounting credit challenges.
Due diligence by successful acquirers extends well beyond verifying data. An intermediate stage of capital, mezzanine is typically employed by middle-market companies to fill a shortfall in financing.
To succeed at fund raising when banks won't help, you need to understand private equity investors. Collateralized Loan Obligations (CLOs) will change the nature of lending relationships Collateralized Loan Obligations (CLOs) will change the nature of lending relationships
With the barriers to interstate banking falling in the 1980's, bank mergers dramatically changed the look of Northwest banking.
Cheap credit, economic prosperity, and market liquidity are driving mergers and acquisition activity.
Personal guarantees seem a simple and easy way to achieve financing for your business, but when the guarantee involves millions of dollars the implications should be closely considered.
A private equity partner is one avenue to address your business and personal objectives.
When considering acquisition bids from private equity firms, factors other than price may weight heavily.
Once the sale price has been agreed, many sellers believe the rest is just paperwork. Think again, many important issues still need to be decided and the owner needs to stay involved.
Day-to-day and seasonal fluctuations in working capital investment is always the subject of debate when closing the sale of a privately held business. Credit is tightening-be prepared.
Business owners beware; do not underestimate the exhaustive financial due diligence process by a prospective buyer when selling your business. Once reserved for restructure or rescue financing, second lien notes have quickly grown to replace subordinated debt mezzanine financial.
Seller Math is flawed economic argument often used by owners when considering a sale of their company.
Buy-sell agreements provide investors in private businesses an escape mechanism, but are these agreements counter-productive? Why small good businesses are valued differently than their larger counterparts.
To be successful, mergers and acquisitions need to be made with the company's strategic vision clearly in focus. How financial needs are met and who supplies the capital has changed for large middle-market businesses.
Now is a good time to consider locking in longer-term fixed rates.
Uncertainties and transferability issues can blow up the sale. Mitigating your lender’s fears may be the key to retaining a critical relationship.
Lenders are ready and willing to make loans, but businesses remain wary; for some this could be a mistake.
Not everyone looks through the same economic lens. Many owners view the value and price of businesses as the same, which can be a misconception.
Given the changes in today’s economic environment, what return should a private equity investment generate?
Business owners seeking capital will find private equity funds highly selective and discriminating. Credit is scarce and the outlook is gloomy, so what can be accomplished in this economic environment?
Whether or not you plan to sell your business in the future, being prepared to sell now translates into greater value and success for your company. |
