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