Quick reads
There are a number of factors which, if present, make a good case for a private buyer to be able to approach a funder with a potential transaction. Some of these include:
- A business which has been in existence for over 10 years
- A business which has been for sale for over 6 months and has likely exhausted the idea of a trade or private equity sale
- A solid balance sheet, over £250,000 net asset value
- A retirement sale
- A paternalistic owner ie he/she wants to leave some form of legacy for their efforts
- A business where the owner might consider selling less than 100% of the equity
- Stable/growing profits, typically above £250,000 and below £1m per annum
- Positive cash generation
- Visibility of future growth for the prospective buyer
- High calibre (and long standing) second tier management team
If many of the above are present, then there is a really good chance of a funder taking a serious look at the transaction.