“An ounce of prevention is worth a pound of cure.”
~ Benjamin Franklin
✓ Guidance in how the buyer’s loan will impact the seller’s desired structure.
✓ Pre-qualification of potential buyers for the loan amount and type needed.
✓ Consultation on subordination, claw-backs, earn-outs, and guarantees.
Free assistance to sellers
Preventing lending M&A requirements from preventing your desired deal structure
Loan programs and lenders impact deal structures
External financing is likely to play a key role in your buyer’s ability to finance the acquisition of your practice.
Your buyer is likely going use a conventional or SBA loan. Each one has requirements and restrictions in the kind of acquisition or equity buyout structures for the loan to qualify.
While sellers and buyers have a lot of flexibility in how a deal is structured, if financing is needed, the flexibility can’t expand beyond the allowable limits of the specific loan program and lender.
AdvisorLoans works with sellers to match which loan programs and corresponding lenders will be able to accommodate the loan amount and structure the seller is seeking.
Guide your buyer to the appropriate loan program
The deal structure sellers develop have a direct impact on the lending options the buyer would need to select and qualify for.
A seller may be looking to stay on in a key role after the sell for longer than 12 months, would like to sell equity in tranches over time, would like to maintain some ongoing level of equity, would like to completely avoid seller financing, or may prefer a down payment with an earn-out period.
In all these cases, conventional and SBA loans and corresponding lenders have different rules and capabilities. Sellers who are set on specific ways they want to exit and get paid should insist that their potential buyer can qualify for the loan program that allows for the seller’s ideal structure.
Financial Screening & Buyer Pre-qualification
Pre-qualify Potential Buyers
AdvisorLoans makes the process a whole lot easier for sellers by pre-qualifying potential buyers against the underwriting criteria of the lending program needed.
We sign a NDA with the seller and the seller uploads their financials into our secure portal. The seller then directs the potential buyer to AdvisorLoans for pre-qualification.
This prevents the seller from disclosing their financials to every interested buyer before knowing if the buyer is pre-qualified first.
AdvisorLoans analyzes the combined cash flow, add backs, buyer credit strength, identifies red flags, and evaluates the likelihood of the buyer qualifying and successfully getting approved for either a conventional or SBA loan, and then specifically for our lenders within these programs.
When a buyer passes the AdvisorLoans screening and receives a pre-qualification term sheet proposal, then the seller can provide their financials to the prospective buyer.
AdvisorLoans will then be poised to navigate the loan process with the lender when the buyer and seller come to a final agreement.
