Tag

distribution

2 insights

Two proportional circles of the buyer's cash at closing on the same $18 million acquisition with the same $3 million seller note. With the note on full standby it is $4.2 million. With the note paying current interest and principal it is $7.2 million, a difference of $3 million.

The Seller Note Counts as Equity, or as Debt. The Terms Decide.

On an $18 million acquisition, the same $3 million seller note moves the buyer's cash at closing from $4.2 million to $7.2 million, depending on whether it is on full standby. SBA rules for the same question changed on October 1.
Financing StrategyBorrower Advisory
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Twelve monthly columns of working capital tied up at a $24 million holiday goods distributor. Months January to July sit below the $6.8 million covered by the owner's cash and a line sized on the average month. August to December rise above it, peaking at $9.74 million at the end of October, $2.94 million short.

The Best Quarter Starts With the Emptiest Bank Account

A $24 million holiday goods distributor ties up $9.74 million in receivables and inventory at the end of October, against $6.8 million on an average month. A credit line sized on the average runs out in August and is $2.94 million short at the peak.
Financing StrategyBorrower Advisory
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