We recently invited Scott McGregor, Commercial Broker at Mortar Finance to a webinar on the topic, ‘Funding Your Next Business Acquisition.’
Here’s what he said -
6 months trading is not a huge amount from a bank's point of view, but certainly you would need information up to date and a very comprehensive and rigorous forecast on where that business is going and the assumptions behind that. So that might be a new contract has been won for the business, which is going to generate X amount of cash flow that the bank can then rely on.
But, it will also be a thorough understanding of the current business and the new business and how they might be working together. So, there would be a lot of research around both businesses and the ability to repay. Certainly not impossible to ask, but 6 months trading is not a lot for the bank to work on so it's going to be really around how we can understand the story and convey that message to the bank for them to be comfortable.