Completion of the buyout energized the remaining partner’s commitment to the growing business.
The founding partner of a Rhode Island site preparation construction company serving commercial and government clients was looking forward to retirement. The company’s two remaining partners were seeking a $400,000 loan for the final installment of a planned buyout; however, their bank wasn’t able to accommodate their loan request because prior installment payments had strained operating liquidity. Wishing to preserve their relationship with a company they held in high regard, the bank reached out to The Business Development Company.
Recognizing management’s desire to satisfy the final buyout payment without using cash or borrowing on the credit line, The Business Development Company provided a $400,000 term loan to spread out the impact over five years.
Completion of the buyout energized the remaining partners’ commitment to growing the business. Five years of increased revenues and profit both replenished operating liquidity and repaid the buyout loan.