We interviewed Kelly Lamirand, Senior Vice President at KeyBank to discuss what business owners should expect from Senior Lender M&A due diligence. Among other things, Kelly discusses:
- What information do senior lenders require when performing bank due diligence in an M&A transaction?
- Why do banks conduct due diligence?
- Common lending terms including revolver availability, cashflow recapture, and airball
- Discussion of the "5 C's of Credit," Character, Capacity, Condition, Collateral, Capital
- What debt levels are senior lenders comfortable with from a total debt perspective and a senior debt perspective?
- What factors into the interest rate senior lenders charge? Does a bank's relationship with the private equity firm factor into pricing?
- What are debt covenants and what purpose do they serve?
- How do banks view growth capital expenditures vs. maintenance capital expenditures?
