Business Buyouts: Getting A Boost In Working Capital

December 14, 2017 by CNH Finance, LP in category “Financing”

Busing buyouts are complex, and need to be handled carefully and efficiently. Both liabilities and assets must be analyzed to see what should be kept, what needs to be released or sold off, and what needs to be assumed and paid off at a later date. However, to keep business buyouts on track, entrepreneurs need a reliable source of working capital.

Bank Loans And Business Buyouts

Despite traditional loans being the go to funding method for business buyouts for decades, entrepreneurs are taking a new approach. Many entrepreneurs have realized that bank loans can delay business buyouts, and prevent the ability to thrive and grow after the agreement is finalized. The reasons for this are twofold. First, bank loans, due to red tape inherent to traditional financial institutes, can take a long time to process. This can cause business buyouts to take longer than expected, or cause both parties to withdraw out of frustration. Second, bank loans create debt.

Business Buyouts And Assets

During business buyouts, it is important to make a thorough assessment of any assets held by the company being acquired. In this instance, assets include owned facilities, company vehicles, equipment, inventory, and receivables. It needs to be stressed that assets are things which are owned by the company. Leasing contracts are considered liabilities, and should be zeroed out wherever possible. Any assets acquired during business buyouts can be used as a source of working capital to keep your own company on track, without losing any momentum.

Working Capital From Your Buyout

Any assets gained through a business buyout can be leveraged to create a revolving line of credit to maintain a large source of working capital. The revolving business line of credit does not have the restrictions of traditional loans, nor does it place any debt on the books. Businesses can utilize asset based lines of credit to maintain momentum after a buyout, and grow to their potential without liabilities, such as loans, holding them back. Asset based lines of credit can also be arranged much faster than bank loans, so businesses can keep to their projected timelines without experiencing any delays.

Asset Based Lines Of Credit

At CNH Finance, we specialize in asset based lines of credit. If you are performing a buyout, instead of selling off assets at a greatly depreciated value for working capital, talk to our team. Our experts will tap into the hidden value of the fixed assets you acquire through a buyout, and create a renewable source of working capital for long-term success.

Image for 'Business Finances: Getting Working Capital After Launch'
Business Finances: Getting Working Capital After Launch

Business finances can be tricky once you launch your operation. Regular bills for utilities, maintaining equipment, making payroll, advertising – all of these things can eat into a…

Image for 'Why Startup Businesses Use Asset Based Lending'
Why Startup Businesses Use Asset Based Lending

Startup businesses are known for their lean and agile business models. However, startup businesses also need financing to get established, and to grow in competitive markets. For various…

Image for 'Tax Advantages For Businesses With Fixed Assets'
Tax Advantages For Businesses With Fixed Assets

We frequently explore the benefits of fixed assets and how they can help businesses get financing without needing traditional bank loans. However, there are tax advantages to owning fixed…

Image for 'Seasonal Businesses: Getting Access To Working Capital'
Seasonal Businesses: Getting Access To Working Capital

Seasonal businesses need access to working capital to meet the customer rush, and have access to working capital to stay stocked and maximize sales. While traditional business loans have…

CNH Finance
24 East Ave #1285
New Canaan, CT 06840
Phone: (203) 266-3210

Business Development
Long Beach, CA 90803
Phone: (562) 833-7815

Business Development
3334 E. Coast Hwy, Suite 541
Newport Beach, CA 92625
Phone: (714) 520-1788

Melinda Ficek

Maryland Office
3 Bethesda Metro Center, Suite 723
Bethesda, MD 20814
Phone: (301) 529-9993

Steve Silver

Business Development
5050 Quorum Drive, Suite 700
Dallas, TX 75254
Phone: (972) 687-9157

Rossi Felix