Posted on: August 14th, 2024

noble-acquisition-financing-lenders

The acquisition financing middle market tends to be viewed by borrowers as a vast sea of capital marked by minor differences in pricing and funding amount. Depending on the deal to be done, one needs either more or less acquisition financing to fill in the gap beyond the bank loan. In this context, capital is viewed functionally and indiscriminately as the sum of the terms and conditions within the loan agreement. While this is absolutely the case transactionally, the deal usually represents a much bigger event to the buyer than just a closing. For founder-owned businesses that do not frequently acquire, an acquisition financing is a huge strategic step in the historic evolution of the business. Founder-owned and family-owned businesses tend to be successful due to their relationship and partnering focus with others including employees, vendors and customers. These businesses usually have a strong culture based on knowing the people they work with and go beyond mere legalistic approaches when dealing with them.

Acquisition Financing Decision

When deciding on which acquisition financing lender to choose, these companies value noble lenders, those possessing character, reputation and predictability who mirror their own culture and engagement style. Noble acquisition financing lenders operate within an old-fashioned framework that prioritizes getting to the know the people at the company and understanding what makes them tick. They take the time to go beyond a cursory understanding of the business and learn its history, operating fundamentals and specific areas of strength. Their approach is less number oriented and more holistic based on the ingestion of qualitative, quantitative and soft information. If the relationship with the borrower is intact, most will not make shortsighted decisions that benefit them to the detriment of the borrower. Noble acquisition financing lenders are sanguine when things do not go exactly as planned and supportive when their borrowers need additional financial assistance.

In the acquisition financing arena, capital availability is destiny as companies require reliable access to capital to grow over the long term. Unforeseen capital needs usually arise when acquirers least expect it. This can cause some concern for the acquisition financing provider, especially when covenants tighten up and that working capital availability is utilized faster than expected.

Mezzanine debt borrowing is usually a straightforward activity that many companies use for funding of transitional growth. Mezzanine debt lenders are highly transparent about their due diligence approach and their post-closing loan management making it easy for companies to engage with.

Elections have consequences and positive ones at that for the acquisition financing middle market. While much media attention is paid to the direction of the yield curve and the Fed’s likely rate cuts, scant attention is paid to the more important drivers of the acquisition financing market – business psychology and regulatory climate.

Noble Acquisition Financing Lenders

Acquisition Financing Decision