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Our Guidelines on Succession Financing
It's not always possible to find a suitable successor within the family. Potential buyers are confronted with the issue of succession financing. Company structures and succession processes vary widely, so we consider each case on an individual basis. Nevertheless, there are some general guidelines:
- It should be possible to repay the portion financed by borrowing within five years, and it should not exceed three times the annual profit (before interest, tax and depreciation).
- The equity capital should be equivalent to about half of the purchase price. The vendor's subordinated loans are set off against equity capital for this purpose.
Deviations from these guidelines are possible in justified cases.