For people planning to become self-employed, a business takeover can be a… attractive alternative represent. Taking over an existing and established company brings many advantages.
What are the advantages of a company takeover?
Existing business models have changed already proven and are less questioned. On the one hand, this makes it easier to borrow outside capital, e.g. B. via a bank or an investor, on the other hand, this also helps when concluding or negotiating the conditions of supplier contracts.
The proven business model not only offers advantages to third parties: Through the historical corporate development it is possible to see whether there is actually a market for the offer and whether there is sufficient demand for the products or services. With the company takeover, the risky start-up phase is no longer necessary.
As a rule, companies offered for sale already have a sizable one customer base: If the customers can be taken over, positive business results can be achieved from the day the company is taken over, the costs for a marketing strategy and its implementation are low.
Depending on the type of deal (share deal or asset deal), this will also be the case staff and adopted the structures. The finding phase, which is often expensive for newly founded companies, is no longer necessary. If the staff is well trained, the potential for errors is also minimized. Compared to a company takeover, start-ups often work inefficiently at first, since processes and structures first have to be developed, tested and optimized.
Last but not least, company successors regularly benefit from this expert knowledge the seller in the form of former owners or managing directors. It is not uncommon for a handover or familiarization phase to be contractually agreed, in which the buyer is intensively familiarized with the business operations and learns everything about the business idea from the seller.
Corporate acquisition also has disadvantages
This induction phase is important because when a company is taken over, there is a decoupled growth instead of. The company has already grown and can overwhelm the buyer with a lack of experience. From one day to the next, he becomes a manager and bears responsibility for the employees. When founding a new company, on the other hand, the founder grows with the company and thus into his role.
Depending on the case, the former owner may still have a say in the holdings. There can be differences here. established structures doesn’t have to be an advantage. Established structures cannot always be easily changed: Existing contracts are subject to terms and the staff must first support the changes. The company takeover therefore requires a sure instinct.
In addition, a company takeover is always associated with a high initial investment connected: The purchase price is to be paid regularly in one sum. Rarely is financing via installment payments. State subsidies make it easier to finance the initial investment and also offer support.
What subsidies are available for a company takeover
Anyone who decides to take over a company can benefit from various subsidies. Possible funding are:
- Subsidized Loans
Basically, the higher the equity ratio, the higher the probability of financing. With the ERP participation program buyers can expand their equity base by providing liable capital through private corporations. This support, aimed at SMEs, also applies in the event of a company takeover. The funding can be up to EUR 1.25 million, but should not exceed the available equity. As a rule, the term of such a participation is 10 years. In the new federal states and Berlin, this is extended to 12.5 years.
Depending on the state, there are other participation programs that make it easier to finance the company purchase price.
No collateral has to be provided for the equity increase as part of such subsidy programs. Existing securities can therefore be used to finance the remaining amount via banks. The improved creditworthiness pays off here. It is not uncommon for such equity participation programs to enable larger investment volumes to be financed in the first place.
If the buyer lacks collateral to provide to the bank to obtain financing, the Security via a public guarantee possible. The guarantee bank of the respective federal state can assume the liability risk from the financing bank and thus improve the creditworthiness of the buyer as a borrower. This significantly increases the probability of a financing commitment. The guarantee fees are usually only a few percent of the financed amount.
Subsidized loans can regularly be used for a business takeover at both the federal and state levels. At the federal level, the Credit institution for reconstruction (KfW) for example the ERP start-up loan or the ERP start-up money, the ERP capital for start-up or the ERP start-up loan universal. Which program comes into question depends on the specific successor constellation and the financing requirements.
The funding for such loans tailored to founders and company successors consists of the granting of repayment-free start-up years as well as particularly low interest rates and a proportionate assumption of liability by KfW.
The promotional loans are applied for after house bank principle. Successors will first go to their house bank or a regional bank and if the vote is positive, they will forward the request to KfW.
A company takeover is also subsidized by the state through grants. Which grants are eligible is strong dependent on the individual case.
In North Rhine-Westphalia for example Prospective company successors can be professionally accompanied by a recognized management consultancy and thus benefit from the know-how. The NRW Economic Advisory Program of the Chambers of Industry and Commerce offers reimbursement of 50% of the advisory costs up to a maximum funding amount of 4,800 euros. In special development areas of North Rhine-Westphalia, an RWP investment cost subsidy can also be granted if jobs are created or secured as a result of the company takeover.
In addition to tangible assets, the Employment Agency training and further education or the hiring of new staff are also promoted. Here, too, it depends very much on the individual case:
If the company is taken over from the receipt of unemployment benefit I or II, funding via the start-up grant or the entry grant is also possible. The successors receive additional benefits on top of their regular salaries. In this respect, company succession is treated like starting a new business.
However, eligibility for grants is highly dependent on the location, industry and intended investment areas of the acquiree.
Obtain information and use advice before taking over a company
In order to consider all relevant subsidies and to check the eligibility of your own takeover project, it is advisable to consult a professional management consultancy (service tip: search for a consultant). Depending on where the buyer lives, this consulting service can be subsidized. The management consultants then support successors in identifying suitable funding programs (service tip: funding check) and preparing the necessary documents for the application.