Buy and Build Ep 43: Asset-Backed Loan Options for Acquisition Financing - Paul Leitao [Founder: Mercurio Capital]
18 snips
Jul 11, 2022 AI Snips
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Business Classifications
- Businesses are categorized as either asset-heavy (e.g., manufacturing, transportation) or asset-light (e.g., SaaS).
- Asset-light businesses tend to have higher profit margins, while asset-heavy businesses have lower margins but more tangible assets.
Leveraging Physical Assets
- Leverage physical assets in asset-heavy businesses for acquisition financing.
- However, the type of asset matters significantly for lenders.
Ideal Assets for Leverage
- Transportation vehicles are ideal assets for leverage because of their liquidity and ease of repossession.
- Lenders assess market value rather than book value for these assets.