Management Buyouts (MBOs) present significant opportunities for business owners, financial sponsors and senior management to unlock wealth held in their business.
The ability to gain direct equity ownership of the business and create an entrepreneurial environment is an attractive proposition, as is the chance for management to increase their personal wealth.
A number of situations make MBOs an appropriate option for SMEs – for instance, where there is a disagreement among senior management or when a partner is keen to step aside from the company.
However, the first consideration must be to decide which method of finance is most appropriate. In particular, asset finance provides suitable options for releasing cash based on the strengths of the business and its future potential profitability, especially when management themselves may not be in a position to contribute equity to the deal.
Expert advice is vital to ensure that the process is executed properly and sufficient money raised to successfully complete the MBO. An adviser will be able to take a look at the available hard assets and identify how best the money can be raised. Another advantage is that unlike a bank loan, this can often be achieved without the need for any securities.
Specialist providers, like Praetura Asset Finance, can be invaluable in offering the best advice and providing rapid access to funds to assist in the successful execution of a management buyout.
For more information, call us today on 0333 323 7800.