Documents initially needed for a term sheet proposal?

All Loans:

• Application
• Practice Performance Statement
• 2024, 2023, and 2022 personal/business tax returns
• 2024 P&L and Balance Sheet (if 2024 is on extension)
• 2025 Interim Financials

For Any Acquisition:

• Letter of Intent or deal terms
• Pro forma

Seller Docs for Partial Book:

• Report showing seller’s total AUM
• Amount of AUM/Revenue being sold
• Percentage of revenue in recurring revenue
• Any associated costs buyer will incur

Seller Docs for a Complete Asset/Equity Acquisition add:

• Report showing seller’s total AUM
• 2024, 2023, 2022 Tax returns or Schedule Cs

How does AdvisorLoans securely manage documents?

We utilize LoanBox which is a secure document management system.

What is the 4506-T form?

Most lenders require verification of the buyer & seller tax returns through the IRS. The 4506-T form allows a lender to pull transcripts of the filed tax returns directly from the IRS.

What about the pro forma projections?

This is one of the more important items for acquisition underwriting. Projections are for the first 2 years of the combined businesses post acquisition. The bank wants to see that after combined revenues, and expenses, there is enough cash flow to make the loan payment and have room left over to meet their minimum DSCR ratio.