Embarking on an acquisition journey entails navigating a maze of legal documentation essential for a successful transaction. Let’s delve into the key legal documents required and their significance in the acquisition process:
2nd Level: Reference ability Checks
Delving deeper, it’s essential to scrutinise the character and reputation of the vendors involved. Conducting reference ability checks by reaching out to business development managers, partnership managers, and individuals associated with the target acquisition provides invaluable insights. Identifying any red flags regarding the vendor’s integrity or reputation is crucial, as acquiring an asset tainted by poor character can prove detrimental to your business. TrailBlazer Finance has numerous methodologies to delve deep.
3rd Level: Legal Searches
Lastly, thorough legal searches are indispensable to ensure a seamless acquisition process. These searches encompass verifying ownership, clearing titles, and identifying any encumbrances or outstanding debts associated with the asset. By meticulously conducting these searches, you safeguard against potential legal entanglements that could impede the acquisition’s success.
Although every acquisition journey may unfold with its own set of nuances, certain foundational principles persistently stand firm. With the expert assistance of TrailBlazer Finance, meticulously addressing these aspects of due diligence empowers you with the optimal opportunity for success in your acquisitions endeavours.
Interested in gaining insights into the crucial aspects of a prosperous acquisition? Our comprehensive eBook, “Acquisition Ready: The 10 Things Finance Professionals Must Cover,” meticulously crafted by our specialist funders, offers valuable guidance to navigate the process effectively. Download today.
In the ever-evolving realm of business expansion, acquisitions emerge as powerful drivers of success. They present a thrilling opportunity to instantly double your business, skipping the lengthy process of organic growth. Through acquisitions, you not only achieve increased scale and efficiency but also gain the freedom to delegate day-to-day operations. Furthermore, your margins, purchasing influence, and market share undergo swift enhancement, marking the dawn of a prosperous new era.
However, the road to successful acquisitions is paved with layers of due diligence. Successful acquisitions hinge on meticulous due diligence across asset valuation, reference ability checks, and legal searches. By prioritising these critical steps and leveraging the expertise of TrailBlazer Finance, you pave the way for transformative growth and prosperity in your business ventures.
1st Level: Asset Valuation Due Diligence
At the outset, it’s imperative to conduct due diligence on the true value of the asset you’re acquiring. Engaging a third-party expert to perform a detailed valuation ensures accuracy and transparency in assessing the asset’s worth and its potential for leveraging. While some may possess the expertise and resources to undertake this task internally, most opt for the objectivity and proficiency offered by external valuers.
2nd Level: Reference ability Checks
Delving deeper, it’s essential to scrutinise the character and reputation of the vendors involved. Conducting reference ability checks by reaching out to business development managers, partnership managers, and individuals associated with the target acquisition provides invaluable insights. Identifying any red flags regarding the vendor’s integrity or reputation is crucial, as acquiring an asset tainted by poor character can prove detrimental to your business. TrailBlazer Finance has numerous methodologies to delve deep.
3rd Level: Legal Searches
Lastly, thorough legal searches are indispensable to ensure a seamless acquisition process. These searches encompass verifying ownership, clearing titles, and identifying any encumbrances or outstanding debts associated with the asset. By meticulously conducting these searches, you safeguard against potential legal entanglements that could impede the acquisition’s success.
Although every acquisition journey may unfold with its own set of nuances, certain foundational principles persistently stand firm. With the expert assistance of TrailBlazer Finance, meticulously addressing these aspects of due diligence empowers you with the optimal opportunity for success in your acquisitions endeavours.
Interested in gaining insights into the crucial aspects of a prosperous acquisition? Our comprehensive eBook, “Acquisition Ready: The 10 Things Finance Professionals Must Cover,” meticulously crafted by our specialist funders, offers valuable guidance to navigate the process effectively. Download today.
A successful acquisition has the potential to transform your business, offering immediate scalability, improved efficiency, and the ability to delegate day-to-day operations. Moreover, it can result in instant enhancements in margins, purchasing power, and market share, propelling your business towards unprecedented success.
However, when venturing into the world of acquisitions, understanding the intricacies of the approval process is paramount. Before proceeding with an acquisition, thorough familiarisation with all relevant legal documentation outlining future payment rights is essential. Let’s delve into what you need to know:
Aggregator, Dealer Group, or Franchise Approval
In the acquisition landscape, securing approval from your aggregator, dealer group, or franchise is often a prerequisite. This step is vital as it grants you the legal right to take ownership of the acquisition target. However, it’s essential to note that approval procedures can vary significantly depending on the entity involved. Trailblazer Finance can guide you through this process.
Restricted Approval
Approval may come with certain constraints. For example, some aggregators restrict acquisitions to their existing members, while specific mortgage managers may impose prerequisites such as specific guarantees and qualifications. Similarly, franchises typically require acquirers to become franchisees to access acquisition opportunities.
Failing to obtain the necessary approvals poses a significant risk, potentially resulting in the nullification of the acquisition and the loss of deposits or payments made.
Poorly executed acquisitions can spell disaster. Inadequate preparation and due diligence can devalue both the acquired asset and your existing business. Compliance issues further exacerbate the risks, potentially causing irreparable damage.
At Trailblazer Finance, we specialise in guiding clients through the acquisition process, ensuring optimal outcomes every step of the way. From conducting due diligence to negotiating agreements and securing financing, we provide comprehensive solutions tailored to your unique needs. With our expertise by your side, you can navigate the complexities of acquisitions with confidence and achieve your business objectives. Trust Trailblazer Finance to be your partner in success.
Eager to gain in-depth insights into the crucial elements of a successful acquisition? Download our comprehensive eBook, “Acquisition Ready: The 10 Things Finance Professionals Must Cover,” crafted by our specialist funders.
AFG has announced a new outsourced trail book marketplace for brokers through an arrangement with specialist cashflow lender and Mergers & Acquisitions advisory firm, TrailBlazer Finance.
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Are you equipped to weather all seasons in 2021?
Congratulations – you survived the Covid-19 flash storm that engulfed 2020! But before the uncertainty and turbulence of 2020 dwindle into the recesses of our collective memory, stop to ask yourself what does the rest of 2021 hold for the mortgage and finance brokerage industry?
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The aggregation group has appointed a specialist lender, TrailBlazer Finance, to its asset finance panel, making more products available to its broker members.
Australian Finance Group (AFG) has welcomed trail book lender TrailBlazer Finance to its asset finance lender panel.
The addition will provide AFG brokers and their white-collar clients with access to the lender’s funding products and advice, which is specifically created for those with recurring revenue streams, such as brokers, financial planners, accountants, real estate managers and other cash flow businesses.
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We recently launched a new low repayment loan for mortgage brokers and financial planners. Designed to boost cashflow, the Balloon Booster is structured like a balloon loan and features lower monthly repayments and flexible end-of-term refinancing options, allowing the balloon to be paid out or refinanced into a two-year loan.
Importantly, the loan product allows brokers and planners to better manage cashflow and maximise working capital at a time when many small businesses are struggling with their short-term cashflow needs.
Jeff Zulman, Managing Director of TrailBlazer Finance commented, “We know from talking to our clients that right now many brokers and planners need a short-term cash boost to free up working capital as they navigate the evolving post-COVID-19 market.
The Balloon Booster is designed specifically for this purpose. It is a low repayment product, with repayments 50 per cent or lower than those of our standard loan product. This helps our SME clients manage cashflow when they need it most.”
The new loan product further strengthens the specialist lender’s offering to its broker and planning clients, with Mr Zulman adding, “TrailBlazer Finance is committed to delivering the best possible solutions for these white-collar professionals. We are proud to be able to provide a product which is tailored to the needs of our clients, and the industry more broadly at a time when others are tightening their credit criteria and raising rates.”
Understanding the drivers and what they mean for your brokerage
For the mortgage broking fraternity, like most industries, 2020 continues to present a litany of challenges that colour the future with a particular shade of uncertainty that appeals to only the most hardened opportunists.
If we get down to it, how are the smartest and most adaptable mortgage brokerages adjusting to the myriad challenges being presented? And where are the opportunities to turn these challenges into upside and create additional value in your business?
Navigating the valley of death
One thing we have learnt from businesses who have teetered on the precipice and successfully navigated through the valley of death and out the other side, is they often emerged far stronger – and done so by embracing change not just once, but again and again. Think Lego, Apple, Disney and Amazon. Each has used setbacks as catalysts for innovation, reinvention and disruption.
Mortgage brokers have also had to overcome their share of market shifting adversity over the last decade – be it threats to trail, regulation cuts, a Royal Commission and an ever-heavier compliance and educational burden. So those that are still standing have already had their resolve tested and proven their resilience. COVID-fuelled recession is just another round of fire, albeit an unprecedentedly heavy one.
Where is the value?
So far, we have not seen any notable negative impact on the value of trail book and mortgage brokerages from the current COVID-19 market maelstrom. But there has been a clear split in the pack with an increase in brokers leaving the industry. As a result, we’ve seen an uptick in stronger brokers approaching us for larger loans to fund book purchases as they sniff out opportunities.
We have identified seven drivers of trail book value and what you need to look at when buying a book or preparing your own business for sale at the optimal value:
1. Seasoning. This is the length of time individual loans have been on the book. The longer they’ve been in your book, the higher the value.
2. Underlying run off. This looks at how quickly the book is losing loans. Focus on embedding those relationships.
3. Arrears and clawbacks. Frequency with which clients slip into arrears or loans are clawed back. A potential challenge in the current market.
4. Growth in underlying loans. Growth in the number and value of those loans. Hold tight to the loans you do have.
5. Growth in trail. A growing trail book is a valuable asset, particularly in a time of uncertainty. Tap into gaps in the market.
6. Not all loans are equally valuable. A properly structured investment loan, for example, could be a more valuable asset than a residential loan. Write loans where you haven’t previously.
7. Underlying spread of lenders, borrowers and products. Focus on the mix and diversity. Concentration risk is a negative.
And a dollop of better, smarter, faster will not go astray
Innovation is not necessarily about scrum masters and setting the world on fire. It can be as simple as getting the basics right. If you look hard enough, there are quick wins out there both from a resilience and value-building perspective. Check out our five tips to help prepare your business for what comes after COVID-19.
Take two minutes to get a sense of your trail book value
Check out our free trail book valuation calculator to get a sense of the value range for your trail book today.
You can also download our valuations flyer for further information.
