While every situation is different and poses its own unique challenges, there are some fundamentals to our approach in common.
Over the last three decades, we have had many of the same questions arise.
Here are some frequently asked questions about working with Equity Partners HG – from entrepreneurs and referral sources – to help you get started on your journey with us.
Q: Why not do this myself?
A: Evidence shows that using a professional investment banker or capital advisor costs you less than the value added by their work. We have many clients and colleagues who wholeheartedly agree. While we get results quickly, what we do is extremely time consuming; you just can’t do this yourself and manage a business, too. Our experience is invaluable. We have built solid relationships: After nearly 30 years, we not only know the lenders, investors, and buyers that look at specific industries and businesses of a certain size, we are able to leverage those relationships and experience to achieve the best result for our clients.
Q: How do you get paid?
A: We try to set up our compensation so that our interests are aligned with yours. Some or all of our income is dependent on you accepting a solution and it closing.
Q: What happens if the accepted deal falls apart?
A: Because we are careful about selecting the winning investor, lender, or buyer, this rarely happens. We like to have “backup bids” so that, should your chosen partner, buyer, lender not close for whatever reason, we have a readily available plan B, which is often almost identical to plan A, and no time is lost.
REVITALIZE | Special Situations FAQs
Q: What’s more important – bankruptcy savvy or industry-specific experience?
A: You don’t need an industry-specific expert. You need a firm highly experienced in distressed transactions that can navigate bankruptcy, foreclosures, assignments for the benefit of creditors and the like. You need a firm that understands the laws and the pressure points and can get investors, buyers, and lenders to move quickly.
Q: I already have one interested investor or buyer, so why start a process with you?
A: Pursuing only one solution is not in your best interests for two reasons:
1. It is impossible to know if that option is truly the best deal without any market comparison.
2. If the deal falls through, you have lost valuable time.
We test the market to evaluate the deal you have while sourcing multiple offers at the same time. Our process provides you with the best possible offer, not just one. Our involvement often leads to an increase in value to any original proposal by creating a competitive environment.
Q: Can’t I just do this myself?
A: Aside from the time constraints, the intricacies of deal structure, including effectively negotiating many details that will have a direct impact on you, are critical parts of our process. Without the experience of literally hundreds of engagements to draw upon, it is hard to envision a comparable result. Working with a credible third party such as Equity Partners HG not only dramatically improves the businesses chances of survival, but it can help mitigate personal guaranty exposure and litigation risks.
Q: Why not wait to see if I can turn this around, or get some financing, and then contact you if I need you?
A: The sooner you get help, the more options you will have to achieve your business goals. Employees, customers, and creditors all react much more favorably to you being proactive, as does the market. Remember, looking for solutions and accepting a solution are two different things, but waiting too long can be catastrophic.
Q: My business has really dropped off and the bank won’t wait for a sale process. Can you do something right now?
A: Even when you think it’s too late, and the business is dead or near dead, we can often find going concern transactions. We’ve brought multiple offers to the table in less than 30 days on numerous occasions. Creditors get more patient when they know we’ve been hired.
Q: How long will it take to find a solution?
A: Our process is usually 60-90 days from retention to closing.
Q: Can you do valuations for litigation and fairness opinions for plans?
A: Yes. Our partner, Jerry Wilcoxon, is a CPA/ABV and CVA and member of the American Institute of Certified Public Accountants, National Association of Certified Valuation Analysts and a member of the Maryland Association of Certified Public Accountants. His valuations are often used for such purposes. Our Senior Managing Director, Ken Mann, has been an expert witness in numerous bankruptcy cases as well.
CAPITALIZE | Corporate Finance FAQs
Q: We think we can raise some equity, or can get a better rate on our loans down the road, why hire you?
A: Until you test the market and look at all financing options, you are planning around hypotheticals not real options. A true market test will show what is actually available in a competitive environment and often uncovers options you may not have been aware of or even considered.
Q: Can’t I just send my financial data to a bunch of lenders and get a loan?
A: While that sounds like that could work, if you don’t present the information in the right way and to the right people, you will not find financing. Lenders are constantly reviewing dozens of opportunities; our relationships put your business at the top of their lists.
MAXIMIZE | MERGERS AND ACQUISITIONS FAQS
Q: Isn’t a purchase really simple? Why do we need your help?
A: You’ll want to know you got the best deal possible. We turn over every stone to find opportunities you may not see. Through market competition, we give you higher value and more choices. Another point to consider is that deal structure matters and can make a huge difference in how much of the sale price you get to keep. We will help you with that.
Q: How do I know if this is the right time to exit?
A: As you decide if you are better off selling now or trying improve the company, you need to know what’s going on in the market as well as what the market forecast is for the next few years. We have that intelligence.
Q: How do I know what the likely outcome of a sale will be?
A: Our finger is constantly on the pulse of the market. In addition, our valuation expert can give you a formal appraisal if desired.
Q: What if the appraised value isn’t good enough?
A: Often, there are some things you can do to improve the value you receive on exit in a relatively short timeframe of one to three years. We can help you identify those things and help you evaluate the risk reward ratios, the time value of money, and other critical variables. You’ll then make the best decision to exit now or to execute the improvements before pursuing a sale.
Q: What if I’m more concerned about finding the best future for the company, not the best price for me?
A: We understand that money is not the only consideration in your decision-making. We will advise you on how to pursue the best options for your specific goals and circumstances and make sure you pass the company to the right successor(s).