The Indianapolis skyline above Monument Circle at dusk

Capital Readiness

The package a lender or an investor opens, built before the first meeting.

For owners raising equity or refinancing a business that earns roughly $500K to $5M of EBITDA. A credit committee or an investment committee says no to the package long before it says no to the business, usually over a forecast with no basis, add-backs that will not survive a reviewer, or cash nobody can see week to week. We build the model, test the numbers and organize the file the way the money reads it. Buyers financing an acquisition start on the SBA quality of earnings page.

The package, in the order a committee opens it

Lender · investor

The piece

The question it answers

Opened by

13-week cash viewUpdated weekly, with the actuals against the forecast

Is the business in control of its cash, week to week?

Lender

Add-back schedule, testedEvery adjustment with the document behind it, the rejected ones shown

Which adjustments would a reviewer strike, and what is left after they do?

LenderInvestor

Debt schedule and covenant mathCoverage and debt load before and after the loan

Does coverage hold on tested earnings, with the new debt in?

Lender

Monthly working capital and the agingsThirty-six months of receivables, inventory and payables

What does the line have to cover, and when in the year?

Lender

Three-statement model and forecastAssumptions tied to three years of history, with the departures explained

Can the business carry the debt, or earn the return, on assumptions that tie to history?

LenderInvestor

Use of proceeds and the equity storyWhat the money does, and what it returns

What changes with the money, and by when?

Investor

The data room indexOrganized the way the money reads it

Where is everything, and how fast does the next request come back?

LenderInvestor

The package LIMESTONE builds for an equity raise or a refinancing, in the order a committee usually opens it. The lender or the investor still decides.

The package

Each piece answers one question a committee asks.

A lender opens the 13-week cash view and the debt schedule first and asks whether the business is in control of its cash and whether coverage holds before and after the loan, while an investor opens the model and the use of proceeds and asks what the money does and what it returns. Both open the add-back schedule and ask which adjustments a reviewer would strike, and both read the working capital series to see what the line has to cover and when. Nothing in the file is a template. The assumptions tie to three years of history, and the forecast says where it departs from them and why.

Raising equity

Investors, a family office or a strategic partner. The operating model and forecast, the data room, and the numbers behind the story, so the raise runs on a proof point. You run the raise; we make the business ready for it.

Refinancing

A term loan, a line, or a lender who wants more than the tax returns. The debt service story, the covenant math and a package a credit committee can read. Add-backs that clear scrutiny, and a plain read on concentration. We test any customer above 15 to 20% of revenue, and SBA’s concentration rule for a working capital line takes a customer’s receivables above 20% of the total out of the borrowing base.

Two reasons to be here

An equity raise and a refinancing read the same numbers for different answers.

The raise asks what the business becomes with the money; the refinancing asks what it already carries. The same model answers both. The forecast is built forward for the investor, and the coverage is built back from the debt service for the lender.

Calculator resting on financial statements

What we are

We build the package, and the lender decides.

We are not brokers or investment bankers. We take no cut of the money and no fee from any lender, so the structure we describe is the one that fits the business and the lender we suggest is the one that fits the deal. We diligence you the way the money will, so what a reviewer would strike is gone before anyone opens the file, and the forecast is one you can defend in the room.

Three leaders working through the numbers in a glass office above the plant floor

After the package

A package goes stale in a quarter, and the CFO seat keeps it current.

Owners who will raise or borrow again keep the CFO seat in the business, where the monthly close, the 13-week cash view and the lender reporting are standing work. If the capital event is a sale, the buyer’s lender reads the same package, and the Exit Readiness Review runs that test first, from the buyer’s side.

Questions

Three questions owners ask before a raise or a refinancing.

The article on lender-ready financial statements covers what a credit committee reads first. Every deal service is on one page, with the question each answers.

How long does the package take?

It depends on the condition of the books and how many entities there are, so the scoping call sets the window and the fee together, in writing. Day 1 is the later of the last critical item on our request list and cleared payment, and the slow items, the payroll records and the preparer’s copy of the returns, are requested first.

Will a lender accept your numbers?

The lender underwrites its own way and decides for itself. What the package does is remove the reasons a file stalls. Statements that do not tie to the returns, a forecast without a basis, an add-back with no document behind it. On an SBA acquisition with a business purchase price of $3 million or more, the lender holds the quality of earnings, its own or yours once one of its vendors has reviewed it, and the SBA page sets out both routes.

Do you find the lender or the investor?

No. We take no fee from any lender and we do not place debt or raise equity for a fee, so we have no reason to steer the structure toward one lender. We will tell you which kind of lender fits the business, and your banker or advisor runs the introductions.

Get started

Walk in with the package they will ask for.

Tell us what you’re raising or borrowing, and we’ll tell you what stands between you and the money. A short call, then one fixed fee in writing.