Changing of the guard
Abstract: When a borrower hands over the reins of a family business to another owner, it’s important to judge whether that change will be good or bad for loan repayment. Plus, lenders who stay atop ownership changes may be rewarded with new lending opportunities. This article discusses how to assess the company’s management strength, and the importance of looking at a sale’s structure and funding, including the possible use of ESOPs. A sidebar addresses formal contingency plans in the event of a sudden business disruption.