At Mentor Securities we expect that the first three quarters will bring wealth to business sellers. In other words, if an owner(s) really want to sell or raise capital, now is the time to initiate that process. While commercial banks are still somewhat reluctant lenders, especially for leveraged buyouts, there are more non-bank sources of capital for deals.
Key Factors to Consider
- Many banks have teamed with alternative lenders to more quickly process commercial loans, including the debt component of a business acquisition.
- The competitive environment to close deals with higher multiples often necessitates the use of unitranche lending. This approach, combining senior and subordinated debt into one instrument, may be only means to get certain transactions done.
- Carefully determine when and how to use crowd funding to raise equity. At some point, we expect the regulations to migrate and intensify in response to crowd funded issues.