Empower Your Business with Deal Flow Management in Loan Agreements

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I've talked before about one of the first things  a private equity firm will do if they buy your   business. They're going to put debt on it. Now  a lot of us as entrepreneurs really don't like   to have a lot of debt on our business. We're  paranoid about it but private equity firms love   debt. They're going to load you up to the  gills with debt if they buy your business.   Why, because it doesn't seem to make sense  to us as entrepreneurs and that's because we   come from a different world. In the world  that the private equity firms come from,   they measure their performance on what's called  cash on cash performance. In other words, "How   much cash did I put into the deal?" "How much cash  did I get out of the deal?" Now if I'm buying a   10 million dollar company and I can put 3 million  dollars of cash in and 7 million dollars of debt,   I make a return on that 10 of let's say  3 million dollars. My return was three   million dollars on the three million dollars  I put in. In other words, a hundred percent   return. If I was to do that with all cash, in  other words, I put ten million dollars of cash in   and I made three million dollars. My return would  only be a thirty percent. Because they're measured   on cash on cash return they love debt. The more  debt they can put on the deal and the less cash   they can put in the deal the better. They like  it. So if you sell to private equity you better