Buy and Build Ep 33: Royalty Financing: A Compelling Alternative to Debt and Equity Financing - Neil Johnson [CEO Duke Royalty]
5 snips
Apr 25, 2022 AI Snips
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Transcript
Episode notes
Royalty Financing: A Hybrid Approach
- Royalty financing offers a compelling alternative to traditional debt and equity financing, acting like a corporate mortgage.
- It blends characteristics of both debt and equity, allowing businesses to access capital while retaining control.
30-Year Amortization
- Consider a 30-year amortization period for royalty financing to manage cash flow effectively.
- There's no bullet payment at the end; the payments simply stop after 30 years.
Flexible Payments
- Royalty financing offers flexibility compared to traditional loans, adjusting payments based on revenue fluctuations.
- Payments are capped at a 6% increase or decrease annually, mitigating downside risk.