There are several reasons why a business might be transferred: children wanting to take over the family business , employees offering to buy it or simply the opportunity to sell to a third party. In all cases, this transfer of power comes with significant financial, human, and strategic challenges. Whether you want to transfer or take over a business, your financial institution plays an important role in the process. Your financial advisor can even contribute to the success of the operation—provided your relationship is based on trust. Here’s how to maximize your chances of getting a “yes” from them.
1. Prepare a detailed and structured file
Before meeting with your financial advisor, you should prepare a clear, detailed, and convincing file. This documentation shows that your transfer plan is well thought out, realistic, and supported by concrete data. Here is what it should contain:
- Presentation of the company: its history, mission, products or services, customer base, market positioning
- A financial portrait: its financial statements for the last three years, its key ratios, its outstanding debts, its profitability
- A transfer plan: the terms of the transaction, the schedule, the parties involved
- The profile of the buyer: their skills, experience, and strategic vision
- Financial reviews: operating budget, cash flow, three- to five-year projections
A well-prepared file will help you answer your financial advisor’s questions. If you are taking over the business, you need to fully understand its business model so that you can explain it. You need to know the value drivers and key elements that will ensure its short-, medium-, and long-term success. Beyond financial forecasts, you need to be able to present your vision for the business and the growth strategies you plan to adopt .
2. Focus on transparency
Honesty is the foundation of a trusting relationship with your financial advisor. Don’t try to hide the company’s weaknesses or the risks associated with the transaction. If they discover that you are hiding something from them, it could work against you. Instead, clearly identify the weaknesses and propose solutions or mitigation measures. They will prefer a clear and proactive attitude to vague or overly optimistic talk.
For example, if the company is heavily dependent on one major customer, mention this and explain how you could diversify your customer base. If you have no experience in the industry of the company you want to acquire, explain how you plan to remedy this (mentoring, consulting, training, etc.).
If you plan to sell your business while remaining a minority partner or executive, you will need to demonstrate that you have a cordial relationship with the person buying it. Your advisor does not want to find themselves in the middle of a relationship crisis.
3. Involve your financial advisor early in the process.
Too often, business owners contact their financial institution at the last minute, once the transaction is almost complete. By involving your advisor early on in the business transfer process, you help build a collaborative relationship. Your advisor can recommend the right financial products, help you structure the financing for the buyout, and even put you in touch with reliable partners, such as accounting, legal, or business valuation specialists. Their experience will help you avoid pitfalls that could jeopardize your project.
This will give your financial advisor a better understanding of your project and enable them to better defend it to your financial institution. Just like you, they need to understand your business model in order to advise you more effectively.
4. Show your project’s viability
Your advisor must ensure that your business will be able to repay the loan you are requesting. It’s not just about numbers; you need to tell a coherent story: why is this transfer a good idea? How will you ensure business continuity? How do you plan to create value? If you don’t have a vision for the business you are taking over, your advisor will question your entrepreneurial abilities.
Rely on concrete indicators: order book, agreements with customers, team stability, planned innovations, etc. Show that the project is promising, not only for you, but also for your financial institution.
5. Cultivate human relationships
Beyond the numbers, your financial advisor invests in people. Be professional, punctual, respectful, and attentive. Take the time to understand their expectations, internal constraints, analysis criteria, and deadlines. A good relationship is based on communication and reciprocity.
Don’t hesitate to ask questions and maintain your relationship, even when financing is no longer an issue. Talk to them about your successes, the challenges you’ve faced, and changes within the company. This will strengthen your bond of trust and pave the way for future requests. Your financial advisor can become a key partner.
6. Surround yourself with the right people
A business transfer is a complex process that requires expertise in several areas: accounting, taxation, law, business valuation, etc. By surrounding yourself with a competent team, you increase the credibility of your project. This will show your financial institution that you are taking this step seriously and that you are receiving sound advice. Your financial advisor can also share their business network with you and refer you to specialists who will help you move your project forward. By working with well-known and respected people, they will feel even more confident.
If you are considering a business transfer, keep in mind that the support of your financial advisor is not a matter of chance. It is the result of rigorous preparation, transparent communication, and a relationship of trust built over time. By adopting a pragmatic and human approach, you increase your chances of turning a “maybe” into an enthusiastic “yes.” After all, your financial institution doesn’t just finance your project, it contributes to its growth.
Text by Stéphane Bourgeois | Senior Manager, Business Transfers | Banque Nationale
