When will a bank back your business acquisition?

[bigspender]

Has anyone used a bank to finance a business acquisition before?

I am curious about the criteria a bank would use in deciding when you back an acquisition.

 

[PaulThompson]

It depends on the bank - we work with 150 different lenders depending on the client's circumstances.

 

[bigspender]

Is there any general documents/data or information you buyers for - before funding an acquisition?

 

[HFE Signs]

Banks will always measure the risk to them and look for some kind of security this obviously varies profusely from one case to another. I've always found Barclay's pretty good once you have established a good relationship with your account manager and they can see some history on the account.

 

[PaulThompson]

Would you like to discuss the case bigspender?
We'd basically want to demonstrate that the lender is likely to get their money back and what would happen if they didn't
Without knowing the details I can't tell you more, the list is pretty exhaustive.
That's what people like us get paid for.

 

[Paul Norman]

The banks will be looking to reduce their risk to about zero. That means that they will look for easily redeemable value in the business, or, in most cases of smaller business, security from yourself. Which will be your house.

It is worth epeaking to someone like Paul above.

 

[PaulThompson]

Absolutely - lending money is about mitigating the risk, the more risky the business and it's ability to repay, the higher the rate or the more background security likely to be required.