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Funding In The Current Climate Phil Gray Commercial Director.

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Presentation on theme: "Funding In The Current Climate Phil Gray Commercial Director."— Presentation transcript:

1 Funding In The Current Climate Phil Gray Commercial Director

2 Agenda for today The Market Today Funding An Acquisition Preparation Structuring A Deal Preparing For Exit Questions

3 The Market Today The banks are very much open for business with an appetite to lend Each deal “very much” on its own merits Lower debt multiples – 2 x EBIT LIBOR now back at its usual level is a clear indication of the lenders confidence slowly returning.

4 The Market Today Great focus on equity contribution and strength of balance sheet Cost of funds still relatively cheap Good house keeping is key Good opportunities exist offering excellent value

5 Funding An Acquisition Lenders look at the following Management credentials – incoming and remaining Sector Knowledge Serviceability – sustainable EBIT and how this translates into cash Strength of business within its market

6 Funding An Acquisition Lenders also look at the following The effects of the loss of key individuals Market Conditions, product life cycle Competition Environmental, legislation

7 Preparation Is Essential! Professional Business Plan 36 months projections A full pack of financials for target business Sounds basic but in the past decade of “fast cash” good preparation has been forgotten

8 Preparation Is Essential! If Lenders do not understand it they will decline it! What exactly are you buying? How is deal to be structured? What is your contribution/commitment to the deal - “hurt money”?

9 Structuring A Deal Cash Contribution Commercial Mortgage Invoice Finance Asset Finance Cash Flow Loan Deferred Consideration Enterprise Finance Guarantee Personal Debt Private Equity

10 Structuring A Deal Airport Vehicle Company – Gatwick Deal structured as follows £365,000Invoice Discounting £400,000Personal Remortgage £100,000Fleet refinance £400,000Deferred Consideration £135,000EFG Loan £1,400,000Total acquisition price

11 Preparing For Exit Work out your tax plan with your accountant to achieve the best exit strategy for you! Give thought pre sale to deferred considerations / earn outs Is it possible to re finance your assets or debtor book now to release cash and reduce the purchase price accessing a wider range of purchasers?

12 Preparing For Exit Have a full pack of information available for potential purchasers Be patient with the purchaser funding DOES take longer!

13 Thank you for your time today Any Questions?

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