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Commercial Banking > Business Succession > Financing the Business Transition
Financing the Business Transition
A key part of the succession plan is the financing of the change of ownership. The ability of the prospective buyer to obtain the right financing is a key success factor in the execution of the succession plan, the future success of the business and in structuring the right deal for both the buyer and the seller.
Your RBC account manager can advise on the financing options to support the business acquisition and enable a smooth transition.
Some Questions To Consider
- How much will the buyer invest?
- Will debt financing be required?
- What are the sources of debt financing?
- What is the ideal debt structure?
- What are the financing terms and are they reasonable?
Key Factors for Financing
Getting the most desirable financing option will be driven by:
- historical and projected financial performance of the business
- the business cash flow to support debt repayment
- the capital structure of the business
- business assets available as collateral
- attractiveness of business and industry
- the financial characteristics of the buyer
- the business track record of the buyer
- how much the buyer is willing to pay to get the funds
- how much interest and control the buyer is willing to release
Acquisition Financing Options