How to finance a buyout?

Financing a business can be done through several sources, but bank borrowing remains the main source of most business acquisitions.

Here are some useful tips from the Chafii Fiduciary Group partner of business owners wishing to take over a business. To convince a banker, you have to be able to show him that you are the man or woman of the situation, it means:

A preliminary and very thorough audit of the target company. The assertion of your entrepreneurial character demonstrating that you are able to manage the business in the best possible way and you are able to develop it. The establishment of a business plan and forecast that demonstrates your analytical capacity and your medium-term prospects.

Regarding the search for funding itself, it would be best to entrust this to real experienced professionals who are used to dealing with this type of file, who understand the banking language and who have network and relationship. In the financing it is necessary to foresee in addition to the acquisition price the registration fees and the fees of the intermediaries and also a need in working capital.

Accounting expert estimate Auditor's Esti

Where to find the necessary contribution:

A decisive factor in your financing and your contribution, which would ideally be located, between 20% and 30% of the purchase price. It must be kept in mind that afterwards one has to study from file to file and there is no standard fixed input. Your personal contribution may consist of the following elements:

Your personal saving: Savings booklet: A booklet, savings booklet company, sustainable development booklet, etc.

Your personal saving: Savings booklet: A booklet, savings booklet company, sustainable development booklet, etc.

Financial investments. Salary savings: profit-sharing, participation (mandatory for companies with more than 50 employees), company savings plan, inter-company savings plan, retirement savings plan.

Family support: Association with people who could benefit from a tax reduction for their participation in the capital of a Medium sized business

Crowd funding platforms Institutional fundraising (innovative and innovative project) Loans of honour these loans at rate 0 are granted to you personally and without counterpart in the form of guarantee to reinforce your personal contribution. They can, for some record went up to 50 000 euros.

The two main networks that grant this type of loan are:

Choosing the right legal framework is a key choice when a company picks up. The acquisition can be made either by the natural person or through a legal person the entity that is often called Holding. The advantage of the Holding would be to create what is called a floor and be able to perform an LBO (Leveraged Buy-Out). In other words, you loan an intermediary company that borrows and repays the loan by raising the cash of the target company bought back while deducting the interest paid.

Chafii Fiduciary Group has developed a real expertise in this type of assembly and recommends to its customers the best possible scheme. Chafii Fiduciary Group, accounting firms in Paris, Montpellier, Lyon, Marseille, Colmar, Nice and Avignon, accompanies entrepreneurs in acquisition operations. The group has all the necessary skills and partners (legal and tax advice, bank financing, forecasting, etc.) to help entrepreneurs to carry out such an operation.

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