How to Revive a ☠️ Dead ☠️ Deal

Selling
Oct 30, 2024
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In the business world, not all heroes wear capes. Meet the Financing Fixer.

Okay, so we’re more like ‘Deal Detectives.’ We dive deep into businesses, uncover all the skeletons (if any), and get them in shape for a smooth transition to a new owner. Our role isn’t just about selling businesses, it’s about eliminating obstacles that prevent buyers and sellers from sealing the deal. And the biggest obstacle? You guessed it - financing.

In the last six months alone, we’ve watched three deals fall apart, all because financing didn’t come through.

Cue: The Financing Fixer.

Now, let’s start by saying we’ve got a vast network of lenders we know and trust. Many, like the BDC, finance a significant number of businesses that come through Chinook. But we’re writing this blog because, occasionally, when the big guys can’t step up, Ashdown Capital swoops in like a superhero to save the day. And believe me, they’ve saved our sellers and buyers from a mountain of disappointment. After all, our mission is to turn our clients’ dreams into reality.

So how did this dynamic duo of Chinook and Ashdown come together?

It all began when Michael met Keith during his time as a Director at Roynat Capital. Although they didn’t close any deals back then, Michael reconnected with Keith after joining Andrew Still to launch Ashdown Capital on Vancouver Island. Soon after, Keith introduced Michael to a client who was seeking financing for his purchase of an auto body shop. From there, Michael and his team began providing debt opinions for Keith, Mike, and Ramon, strengthening the relationship with each successful deal. From there, the relationship has grown and continues to flourish.

Case Study 1: The Case of the Vanishing Financing

We’d been working tirelessly to close the deal on one of our opportunities, with everything on track as the buyer prepared to remove conditions. The financing condition, especially crucial, was ready to go - or so we thought. The morning of the call arrived, and the buyer confidently opened with, “I’m ready to remove all conditions, but I’ve got a small problem with the financing.”

Naturally, we asked, “Oh? What’s the issue?”

The answer blindsided us: “I have no money to buy this business.”

It was as if the rug had been pulled out from under the entire deal. The buyer had initially planned to fund the purchase with cash from their own resources, so this sudden revelation was a shock. As we absorbed the news, we couldn’t help but wonder why this hadn’t come up sooner.

But there was no time to dwell on it – we had to act fast. We excused ourselves from the call, explaining the need to contact potential financiers immediately. With the fate of the deal in the balance, we reached out to Ashdown Capital.

After explaining the situation in detail, Ashdown's team jumped into action. Within just 15 minutes, they had crafted a financing solution that could save the deal.

Armed with this new financing option, we returned to the seller. While it wasn’t perfect news - no one was thrilled about needing a financing extension - there was now a light at the end of the tunnel. Ashdown Capital’s involvement bolstered the buyer’s credibility, and after negotiating an extension, the financing came through.

The deal closed successfully, and we couldn’t help but reflect on the importance of our connection with Ashdown Capital. Without their swift support, this transaction would have unraveled, leaving the business back on the market. Thanks to quick thinking and Ashdown’s assistance, the deal was saved.

Case Study 2: The Curious Case of the Home Service Company

This story began with a home service company that had found the perfect buyer. The buyer was all set to be financed through a business financier. Everything seemed on track as the buyer secured tentative funding. However, things took a sharp turn when the buyer didn’t meet the final lending criteria, and the financing fell through.

Rather than letting the deal crumble, we reached out to Michael at Ashdown Capital. Michael and his team reviewed the situation and the company's financials. Within just two weeks, Ashdown provided a financing alternative, and, to the buyer’s delight, the interest rate was substantially lower than what was initially offered. Thanks to their quick work, the deal closed by the end of August, with a loan valued at approximately $1.4M. Crisis averted, deal done.

Case Study 3: The $5.3M Gamble

This deal involved a niche construction company, a $5.3M business under contract with financing already secured - or so we thought. The buyer had a term sheet from another institution, and all parties were moving confidently toward the finish line. But then, just two weeks before the close date, the financier pulled out. No warning, no explanation.

Panic set in. Had we missed something? Was there an issue with the buyer, the seller, or the business itself? We needed answers, and fast. We reached out to Ashdown Capital to see if they could salvage the deal. Ashdown took a look, loved the business, and immediately set to work. They presented a comprehensive financing package to multiple lenders, giving the buyer plenty of options.

In the end, the buyer went with a well-known lender, securing a deal with an interest rate almost four points lower than what was previously offered. Amusingly, the buyer admitted, "You should have sold me harder on Ashdown from the start - you saved me $150,000 in interest!" Lesson learned, deal saved.

Conclusion:

In the world of business transactions, financing can make or break a deal. When traditional lenders fall short, having the right partners in place is crucial to keep things on track. That’s where Ashdown Capital steps in, providing the kind of flexibility and solutions that make all the difference. Whether it's offering alternative financing or securing better terms, they help ensure deals get done.

Ultimately, it’s about more than just closing the sale - it’s about ensuring both buyer and seller can move forward with confidence. When challenges arise, having a trusted network like Ashdown helps us navigate the unexpected and keep deals alive.