A twelve year employee of a local mortuary had a life-time dream of owning the mortuary but he felt that he would never be able to accomplish that dream because of his limited financial resources. He approached Source Capital & Consulting and expressed his desires with a request to assist him in exploring all alternatives.
Source Capital learned that the sixty-nine year old owner of the mortuary had not been actively involved in the business since 1992 and lived in another state. SCC secured permission to begin confidential discussions with the owner’s financial advisor who supplied with the historical financial statements and other financial data.
Source Capital determined that an acquisition could include the purchase of the operating entity with a lease of the facilities and an option to purchase the facilities at a later date. Source Capital conducted an informal valuation of the operating entity and using that value prepared an analysis to determine if the cash flow from the business could support the purchase of the business.
Source Capital presented an offer to the owner of the business and once the terms of a purchase were agreed, prepared a term sheet that both parties signified their agreement to those terms with their signature. Source Capital then proceeded to prepare a financing memorandum that was submitted to selected lenders for their review and consideration.
Offers were received from the lenders and their terms were reviewed and through negotiations of those terms a final lender was selected. It was determined that the most feasible financing terms would include the guarantee of the loan through the SBA 7a program.
Source Capital worked with the attorneys to develop the purchase agreement and the real estate lease agreements to protect the interests of their clients. We also followed the underwriting process, providing the lenders with all the information that they needed, and proceeded through the closing in April of 2007. The owners (a husband and wife team) could not believe that they have been able to accomplish a lifetime dream but they are thrilled with the opportunities that this venture affords their family.
Source Capital & Consulting is pleased to have been a part of assisting our clients in achieving their dream.