The Opportunity Cost of Not Using a Broker
At Precision Capital, it is our job to find you the capital you need, on the right terms, for the right price, at the right time. While some individuals and business owners might prefer to deal direct with their Bank, we would ask them:
What happens if the answer is no, or the Bank can’t lend the amount you need?
Do you and / or your leadership team have the time to start the process again of securing the money you need from an alternate lender or lenders?
Is there sufficient time to engage other lenders? Are you up against a timeline or a condition under a contract?
Is your time and / or that of your leadership team better spent liaising with one finance broking firm, rather than a series of different lenders?
With over 20 years in finance and funds management, we have the relationships and expertise to run a multi-bank process to ensure these milestone moments in your business are not disrupted or delayed.
We reflect on a deal involving a well-capitalised, sophisticated group that was building out a General Practice business. This was during a stint at one of the major Banks, pre-launch of Precision Capital. The group had approached Brendan for some debt funding for the acquisition of another GP business. This would represent the 9th clinic for the group, however, with a reasonable head office support team in place, the group had only just started to generate free cash over the past 3 months. The advice given by Brendan, was that it was slightly too early in the story and that it would be prudent to see an additional 3 months of positive free cash before we could look at some funding for the new acquisition.
The client did exactly that and returned in 3 months with improved trading once again and so an application was presented internally to secure about $1.2m to support the acquisition. Sadly, what transpired was an uphill battle that resulted in an initial decline. When seeking a review, the deal was then considered only with personal guarantees that didn’t value the $6m in cash capital that had already been invested or the character, size and scale of the broader sponsor. After further agitation and review, the deal was approved as presented, but not without some slight delays through the decision-making process.
While ultimately the right result was achieved, what would have happened if the answer was simply no? Would the group have been able to extend the contract to purchase the GP business while they tried to secure capital elsewhere, or would the opportunity to buy the business pass? Would the business be sold to one of their competitors? In our opinion, the opportunity cost of not using a broker is far too high.
At Precision Capital, we are relentless. Relentlessly devoted to our clients and relentlessly determined to secure the right outcome.