Acquisition Financing Services: Stages

Rocky Mountain Capital offers two types of services for our business purchase clients:

(1) Consulting engagements on an hourly basis, for general advisory services in identifying a target for purchase, and negotiating the transaction;

(2) A fixed-fee, payment-for-progress engagement, to obtain financing for a specific purchase transaction.

1. BUSINESS PURCHASE ADVISORY ENGAGEMENT

RMC advises clients in selecting a business to purchase, negotiating price, and structuring purchase agreements and financing.

These services, on an hourly fee basis, are appropriate for buyers who are just beginning to scan the field for an optimum target, or who may have several target opportunities already in hand, and seek professional assistance in narrowing the field to a final selection. Once the target is selected, our services extend to advising the client in price negotiation and purchase agreement, including matters such as allocation of price and terms of seller financing.

Elements may include:

• Targeting opportunities feasible for ultimate purchase financing
• Cash availability analysis for target companies
• Initial price assessment (determining likely range of values)
• Financing scenarios
• Price negotiation
• Purchase agreement negotiation

Scope of consulting engagement varies according to client needs and objectives, and engagements are of typically of indefinite duration, terminated at client's will.

RMC is not an accounting or law firm. We do not provide accounting, tax or legal advice, and we strongly recommend that clients retain professional counsel in those fields as appropriate.

2. BUSINESS ACQUISITION FINANCING ENGAGEMENT

RMC enters engagements to obtain business purchase financing on a payment-for-progress basis, earning progress payments after client accepts a proposed financing scenario from RMC, when a bank proposal letter (term sheet) and a bank commitment letter are accepted by client, and after financing is closed. Typically, more than half of the total consulting fee is not due until after closing, when borrower will have access to working capital included in the bank's finance package.

Fixed fees for progress payments apply against total time and expenses, with the balance due after closing. Total costs are limited "not to exceed" an amount fixed in the contract, which is quoted up-front by RMC according to the size and complexity of the project.

The first 3 steps of a financing project (see "Detailed Services and Timeline" via the link below) are done as initial consultation, without charge -- assuming that client has already identified a target business for purchase, or has narrowed the field to a pair of final candidates. For advisory services in scanning a larger field of prospective purchases, negotiating price, and structuring purchase agreements, a separate engagement for Purchase Advisory Services (above) can be performed, before beginning a financing project.

After qualification & feasibility are determined, and client has accepted a proposed financing scenario, RMC and client execute an engagement letter for financing services. A retainer fee is due at engagement, for the analytical work already completed.

Overall timing, from RMC's receipt of complete application materials to close of financing is typically 7 to 9 weeks (1 to 2 weeks longer, if real estate is included in the purchase). Actual timing can vary, depending on motivation and responsiveness of buyer and seller, and the complexity of the project.