Business loan on buyout
Entrepreneurs who want to take over a business need additional financing in most cases. The taking over of a company usually requires a substantial investment. In addition to the costs for the takeover, in some cases you also still pay for goodwill. The financing can be done with own money but is usually a combination of a business long-term loan and the contribution of own money. The usual term for such commercial financing is 5 years.
Financing of goodwill
When financing goodwill with a business loan, it is important to note that the financier does not value goodwill as this concerns realized value in the future and is not at all certain that it will be realized. This does not detract from the fact that financing of goodwill by means of corporate financing is not possible. The financier will look at the profitability of the acquiring company and, if you already own a business, also the profitability of your own company and your private situation. This must be (jointly) sufficient to be able to repay the business loan. In addition, it is also important that this loan can be covered with securities from the acquiring company, your own company and or securities in private.
If you have insufficient security for business or private reasons, there is also the possibility of financing with a guarantee credit. A guarantee loan is a loan for which the Dutch government partly guarantees. Because the government in this case largely bears the risk, financiers are more inclined to provide loans. For more information about the security loan, see: www.rvo.nl/subsidies-regelingen/borgstelling-mkb -credits-bmkb.
financing from the acquiring company
A business financing for an acquisition could also be made from the acquiring company. This can be done for an amount that is at most equal to the free reserve that is present in the company to be acquired. In this case, the financier finances the acquiring company at the level of the free reserve. The free reserve is then paid out as a dividend to you with which you pay the buying party again.
