Post-Covid Outlook for Dental Practice M&A and Valuation

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Category: Industry News

Created: Monday, 11 May 2020 16:07

Written by Craig Castelli

Caber Hill's Craig Castelli and Kurt Harvey joined Maria Melone of MORR Dental Transitions in a one-hour Valuation Happy Hour to discuss the future outlook for dental practice capital markets activity, M&A, and valuation in the post-Covid environment. 

Click here to view a recording

Confused about the Paycheck Protection Program? You're Not Alone

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Category: Industry News

Created: Saturday, 04 April 2020 15:12

Written by Craig Castelli

April 4, 2020

The federal stimulus for small businesses, known as the Paycheck Protection Program, went live yesterday. But not much happened.

Most banks are still figuring out how to roll out these loans as the guidance from the federal government came in late Thursday, April 2, and still lacks clarity. Many are collecting information from interested customers with plans to contact them directly as soon as they are ready.

Here is what we recommend:

1. If you haven't already contacted your banker, do so now. Many banks will take a "first in, first out" approach to approving applications so make sure that you inform your banker of your interest and complete any forms they request.
2. If you haven't done so already, calculate your average monthly payroll for 2019. Make sure to include the cost of health insurance, retirement plans, and any employer-paid state and local taxes, but also cap any employee compensation at $100,000.
3. Make copies of the Drivers License of any owner who owns 20% or more of your company as they will likely be required with your application.
4. Review SBA Form 2483 and complete the sections you are able. You will need to fill this out in order to apply.

You can find more details on the payroll calculation and requirements for loan forgiveness by reading the Borrower Fact Sheet prepared by the U.S. Treasury.

As always, give one of us a call if you need support.

Disclaimer: The information listed above is based on our analysis and discussions with numerous banks as of the time of this writing and is subject to change upon the release of new information. We will update this page if any material changes become known.

Link to Sample Paycheck Protection Program Loan Application Form

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Category: Industry News

Created: Wednesday, 01 April 2020 15:13

Written by Craig Castelli

The SBA released this sample application yesterday - https://www.sba.gov/document/sba-form--paycheck-protection-program-ppp-sample-application-form

What We're Reading About the CARES Act

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Category: Industry News

Created: Friday, 27 March 2020 20:58

Written by Craig Castelli

President Trump just signed the $2 Trillion CARES Act into law, and everyone's inboxes are being flooded with emails reacting to it and explaining it's provisions. Rather than attempt more of the same, we'd like to share what we've found to be some of the most informative resources:

The briefest - Creative Planning's take on Implications for Small Business Owners.

Slightly longer - The National Law Review's piece titled Small Business Relief in the CARES Act.

The most detailed - Barnes & Thornburg wrote a lengthy but excellent article titled Specifics of CARES Act and Implications for Businesses and Individuals.

These are just some of a number of well-written pieces. We will, however, provide our advice.

If you think you qualify for any of the SBA loans being made available, start preparing to apply. Calculate your monthly payroll, health insurance, rent/mortgage, and utilities expenses, and gather any supporting evidence you have of these expenses. Prepare to also provide recent tax returns and other financial statements, for both the business and yourself personally.

Banks aren't accepting applications yet, and it may be up to two weeks before they can. You, however, can begin contacting banks now, building relationships with key decision-makers and educating yourself on the process and your likely eligibility.

If you would like some guidance specific to your business or industry, give us a call. We're happy to share our perspective on the CARES Act and the market more generally.

Lastly, we are offering a limited number of pro bono hours to help businesses with cash flow modeling and decision-making around the types of financing available. We can also lead capital raising efforts for business owners unable to manage them on their own. Reach out to your Caber Hill contact or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. to learn more.

Your Business in Survival Mode - How Caber Hill Can Help

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Category: Industry News

Created: Tuesday, 24 March 2020 09:50

Written by Craig Castelli

These are unexpected and unprecedented times. We have so many friends whose companies are completely shut down for the foreseeable future, employees furloughed, and worried about where cash shortfalls will be made up. All of us are faced with tough decisions and big challenges in the weeks and months ahead.  The more we can all help each other, the better.  Taking care of yourself, your families, friends, neighbors, and communities is more important than anything at this moment.  That is priority number one and we are trying to help in every way we are able.

Unfortunately, the Covid-19 pandemic has altered the M&A landscape as well. Some transactions are still closing but the majority are on hold as buyers take a wait-and-see approach. Lenders are focusing on their existing books of business and deprioritizing new opportunities. There are some immediate actions you can take:

• If you have an outstanding business loan, call your relationship manager now and ask for help. Many will.
• If you have a line of credit, pull down the entire outstanding amount. Guarantee that you have access to the cash regardless of whether or not you'll need it.
• The SBA is also providing disaster relief loans of up to $2 million per business. Read about that here.
• New government programs are being introduced daily, both nationally and locally. Consult your advisors to determine which are best for you.

 In addition to our traditional deals, we help clients navigate tough times in many ways, including:

• Debt Restructuring / Refinancing
• Short-Term Financing
• Sell-Side Readiness
• Cash Management and Budgeting [Read more about all of these services]

We are also constantly communicating market activity and the current sentiment among capital providers. If we can help in any way, by our services, our guidance, or simply our perspective, please give one of us a call.

Eventually, we will reach the end of this crisis and return to normal. M&A activity will rebound. Private equity firms are still sitting on record levels of cash that they need to deploy, and the investors and companies that believe acquisitions are core to their growth strategies will need the acquisition engines running on all cylinders once things return to normal. If your near-term plans called for selling your business, rest assured that you will still be able to, likely as soon as later this year. If you are in growth mode, ensure that you can weather this storm and position yourself to be even stronger once we reach a recovery.

We wish you the best in these challenging times.

Sincerely,

The Caber Hill Team

Financial Support in Tough Times

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Category: Industry News

Created: Tuesday, 24 March 2020 09:31

Written by Craig Castelli

In response to the Covid-19 pandemic and the resulting financial distress on numerous small and middle marketing companies, we are adjusting our service lines to support clients where they most need our help. In addition to our traditional services, we are offering the following:

Debt Restructuring & Re-Financing

You may be able to consolidate multiple loans into one, reduce your interest rate, extend payment terms, increase the amount of financing available to you – or all of the above. We can assess your options and arrange for new or restructured debt by creating an offering memorandum and making the market for lenders to bid on your business.

Short-Term Financing

Several short-term financing options exist, including factoring (the sale of accounts receivable or purchase orders) and bridge loans (short-term loans designed to be refinanced in under 12 months). These loans inject liquidity into a business to provide for short-term cash needs.  We can evaluate your business, recommend options, create a presentation for lenders, and make the market for lenders to bid on your business.

Cash Management & Budgeting

Cash flow is the biggest concern when business slows or is forced closed altogether. You need to make quick decisions about your team - can you keep making payroll or will you announce a furlough? You need to triage monthly bills, separating essential and non-essential vendors. You may need to alter your full-long forecast and communicate any changes to lenders or investors. We can help you budget for these turbulent times and provide an objective perspective on your tough decisions. We can also aid you in creating new forecasts and developing any lender and shareholder presentations so you can spend your time on more critical tasks.

Sell-Side Readiness

If you originally planned to sell your business in 2020 or 2021, now is the time to double down on your sale preparation efforts. We typically work with our clients for months, and in some cases years, to improve their companies and their ability to receive maximum value in a sale. Our guidance generally revolves around financial reporting, business analytics, organizational structure, and capital structure. These areas become increasingly important when you’re preparing to emerge from a crisis in sell-mode.