Creative ways to meet high asking price

January 26, 2024
by a searcher from Colorado State University in Fairfield, CT, USA
I'm looking for creative ways to structure a deal to meet a high asking price while also keeping DSCRs in a reasonable range. One example might be a big seller note over a long period with low interest. What are other clever ways to achieve this?
from University of Florida in Dallas, TX, USA
Putting a seller note on full standby for the first 24-months is another great way to mitigate some risk there. At the end of the day, a financial institution will most likely require a 3rd party business valuation. I would never feel comfortable going above, say, $100 - $200k above what an independent 3rd party says the business is worth.
from McGill University in Vancouver, BC, Canada
If less competitive, and you think the asking price is fair, you can either apply structure (earn outs, WTB, rolled equity) to a point with the knowledge that this offer is less compelling.
Agree with the other comments above though...don't overpay and don't over-lever yourself.