The Insurance Agency Mergers and Acquisitions Insider

Content by Agency Brokerage Consultants www.agencybrokerage.com; Direct (321) 255-1309

Financing Agency Acquisitions – Understanding Debt Coverage

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. 

October 11, 2018 · Leave a comment

Are You Misrepresenting a Transaction to a Lender?

Acquisition financing can be difficult to secure, but if the deal, including the person attempting to get financing, cannot get approved legitimately then it’s not meant to be.  That is … Continue reading

March 12, 2014 · Leave a comment