Business Acquisition Financing
For companies and individuals seeking to:
- buy a small business
- finance business expansion
- finance purchase of owner-occupied commercial real estate and durable equipment
We compile the loan proposal, find the right lender, get the loan approved, and steer it through closing and funding.
Exit and Succession Planning
We help our business owner clients plan for and execute the single most critically important financial transaction of their lives -- the transition out of their business.
Rocky Mountain Capital's two lines of business often work independently, with RMC called in to secure the buyer's financing, when a business is already on the market. Our services also work well together, with a coordinated business improvement and exit plan yielding a business ready to be financed, for the ultimate buyer to cash out the exiting owner.
Crisis-Proof Business Purchase Financing
Debt finance for a small business purchase was never easy. With the ongoing financial crisis, it can seem nearly impossible.
Conventional lenders won't finance "goodwill" -- the value of the business cash flow. But, that's often most of the purchase price.
With no financing for goodwill, buyers may need 40% or more cash down. The seller may have to accept a 40% or greater IOU from the buyer, staying involved with the business as a prime lender.
Cash Flow Lenders Are Still Available
True cash flow lenders will fund up to 70% of the total price -- for a profitable, established business and a skilled, credit-worthy buyer. Typically, such lenders rely on the loan guarantee programs of the Small Business Administration (SBA), to reduce their risk.
In 2008, there were a dozen or more such SBA acquisition lenders operating nationally. Most have now withdrawn from the market. Only a few remain -- and their credit criteria shift constantly.
Successful Acquisition Financing
To succeed in this market you must:
- know these lenders, and their SBA leadership
- constantly monitor their credit criteria
- tailor each proposal to its best lending propects
That's where Rocky Mountain Capital comes in. RMC's founder, Bob Heffner, is a specialist in business acquisition lending. Drawing on his 15 years' experience in SBA-backed financing, RMC tailors your finance proposal with the right format and credit analysis, delivered to the right SBA contact, with the right lender.
Acquisition Financing Services: Overview
Business Acquisition Finance at RMC: Why Not Just Work with a Bank?
Stages of Business Purchase Services: Advisory Engagement versus Financing Engagement
Business Acquisition Financing Services: Detailed Services and Timeline
Exit Planning: Set and Reach Your Goals
Indecision: the Worst Decision
Too often, owners delay planning, going to market when the business, for one reason or another, must be sold right away. Results:
- Business value may be much lower than expected
- Business doesn't qualify for purchase financing
- Seller must be the lender, instead of cashing out
- Retirement depends on monthly payments from the new owner
- Tax consequences yield insufficient income
- Worst case: business liquidated for value of physical assets only; or no planned retirement
Benefits of Planning
A comprehensive plan to maximize and protect business value, assure business continuity, and provide for personal wealth and estate management can put the owner in control, and yield the right outcomes:
- Current business value, and drivers that will yield desired value, are known in advance
- Business sells on time, at planned value
- Family members or managers are pre-qualified for financing, or business meets requirements of qualified outside buyers
- Tax consequences are planned and minimized
- Risks to the plan are anticipated and mitigated
- Owner realizes objectives for post-sale net income, estate, and personal legacy
Rocky Mountain Capital focuses an array of resources, to define and achieve your business exit goals.
Clients call on our years of experience in small business ownership, management consulting, and negotiating, structuring and financing business sales.
As a member of the nation's premier exit planning organization -- the Business Enterprise Institute -- RMC also draws on a specialized suite of planning software, technical archives, back-office professional support and a national network of experts.
With these assets, and coordinating with your own trusted business advisors, we design and manage a comprehensive game plan, to reach the goals that you define.