About Michael Mensch

Michael is a managing partner and client advisor for Agency Brokerage Consultants, a national mergers and acquisitions firm serving independent insurance brokerages.

Projecting Cash Flow from an Agency Acquisition

2020-09-16T10:04:23-04:00January 14th, 2019|

In my post from October, I discussed debt coverage ratios and EBITDA multiples. Now let’s talk about projecting cash flow. I’m shocked how many buyers make offers without figuring out what the cash flow will be with financing. I’m not alone either. I’ve spoken with many loan officers that deal with the same issue. This article is long overdue.

Financing Agency Acquisitions – Understanding Debt Coverage

2020-09-13T19:02:08-04:00October 11th, 2018|

Different lenders underwrite acquisition financing a little differently; however, they all typically want to stay under 6 x EBITDA on leverage.  The reasoning is fairly simple…cash flow.  As we’ll see below, agencies don’t cash flow well when they leverage themselves over about 6 x EBITDA.  One of lenders’ key underwriting metrics is something called the debt coverage ratio, which is a measure of the cash flow cushion over debt payments. 

National Preparedness Month: Selling Opportunities

2020-09-13T18:59:00-04:00September 15th, 2018|

National Preparedness Month is about taking the necessary steps to prepare for natural disasters or the unforeseen emergency. When it comes to preparing for the unexpected – the first step is to check your insurance coverage. Without the proper coverage [...]

Navigating the Commercial Loan Process

2020-09-13T18:58:02-04:00September 4th, 2018|

If you think a loan is just a loan – stop. The purpose of a commercial loan is to generate revenue, make improvements (equipment) or commence new construction development. Generally, these loans have short durations, some have balloon payments and [...]

All About Agency Due Diligence

2020-09-13T18:57:10-04:00August 11th, 2018|

Agency due diligence means that you've taken the necessary steps to understand what you're acquiring in an agency acquisition. Any time you purchase an existing business, you're not only acquiring  the good: Goodwill Lines of Business Revenues Talent Technology You're [...]

When Not to Buy an Insurance Agency

2020-09-13T18:56:40-04:00July 26th, 2018|

So, you're thinking about the possibilities of owning an insurance agency. Before you make the final decision gather as much information on the prospective purchase and leave nothing to chance. Take advantage of due diligence and hire a professional - [...]

How to Gauge the Health of an Agency Before Buying

2020-09-13T18:56:19-04:00July 11th, 2018|

Internal and external economic factors contribute to the health of most organizations. Other elements playing a major role in the insurance market include commerce risks. When you consider all of the possible components affecting the well-being of an insurance agency [...]