O&MM Fabricator - March/April 2017 - 39

financing terms and improve the likelihood of
success, the acquiring metalworking business
should ensure their offer or business plan is
based on the combined business not just the
current business. It should illustrate how the
combined operations will provide more collateral, more cash flow, and greater growth.
Do-It-Yourself Funding
For many metalworking business owners
and managers, borrowing means a loan from
the operation's owner or shareholder. Our tax
laws create a number of obstacles that must
be overcome in order to avoid the penalties
and corresponding higher tax bills that can
result when IRS auditors restructure loans
that don't meet their criteria.
Whenever a loan is made between related
entities, or when a shareholder makes a loan
to his or her incorporated business, our tax
laws require a fair-market rate of interest be
included. If not, the IRS will step in and make
adjustments to the below-market (interest)
rate transaction in order to properly reflect
"imputed" interest. How large the tax impact
depends on the effect of added interest income
to the lender and the bite of an offsetting interest expense deduction felt by the borrower.

indemnification will also be less difficult, as
certain aspects of risk can be offloaded using
the insurance.
Bring in the Pros
When seeking financing for an acquisition, every buyer should be both prepared
and informed. But, there are some things in
life that should never be done without the
help of a professional, and buying another
business is one of them. A good investment
banker, or a merger and acquisitions professional are usually worth every penny spent.
They can help a buyer research the industry,

find appropriate candidates, qualify the best
options and structure the final deal.
Despite economic conditions, numerous
sources for funding the acquisition of an
established business remain. Naturally, each
lender or capital source has its own unique
and frequently modified criteria for financing, making it necessary for a buyer to spend
whatever time is necessary to research and
explore all of the available financing options
and strategies. The reward could be an affordable acquisition that will help the ornamental
and miscellaneous metal fabricating business
grow, prosper and better compete.

SMALLER IS BETTER
DRILL HOLES IN MORE PLACES WITH THE ULTRA LOW PROFILE
HMD130 MAGNETIC DRILL

Only
6-11/16"
High

Insurance
The use of Warranty and Indemnity (W&I)
insurance policies in M&A deals is becomWeighs only
ing increasingly popular. W&I insurance will
Pilot Light
23.8 lbs
Includes Operator Safety System
protect either the buyer or the seller from a
financial loss that might arise from a breach
800-426-7818 SERVICE * INTEGRITY * RELIABILITY HOUGEN.COM
of the warranties and indemnities given by the
seller. It essentially removes the risk in whole,
or in part, from either the seller or the buyer in850691_Hougen.indd 1
BT-100 Bottom Track Truck Assembly
the sense that the insurance company will be
Wheel dimensions are the
standing behind the warranty claim.
same as all other IGD trucks
With a buyer policy, if the seller commits
fraud, (for example, if the seller has been
1/2" Mounting/Adjusting Plate
1/8" Setting Plate
Part #106-BT
fraudulent in representing any aspect of the
6"
sale), then the policy would still pay out. This is
Six Heavy Duty J-Bolts
because the buyer is the insured party and it has
to Set in Concrete
7"
not been fraudulent nor has it run afoul of the
obligation to make full disclosure to the insur™ TRACK SYSTEM
ers. This provides an extra layer of protection
GATE KIT
for buyers that they wouldn't otherwise have.
U For Wrought Iron, Wood,
Metal, Picket And Chain
For those worried about the credit worthiLink Gates
ness of the seller, or if the seller is not preU UL 325 Compliant
U Patented
pared to offer much in the way of contractual
protection, W&I insurance might be necesINTERNATIONAL GATE DEVICES
sary. In fact, more buyers are purchasing
101 Sycamore Avenue, Folsom, Pennsylvania 19033
insurance to sweeten the deal for potential
(610) 461-0811 s

'!4%	sFAX (610) 534-9682
sellers and to supplement the sellers' existing
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means for indemnification. Negotiations over

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06/01/17 1:14 pm

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34

March/April 2017 * O&MM Fabricator
| 39
12/31/15 9:28 PM


http://www.hougen.com http://www.HOUGEN.COM http://www.slidegate.net http://www.slidegate.net

Table of Contents for the Digital Edition of O&MM Fabricator - March/April 2017

President’s Letter
NOMMA Network
Nomma Education Foundation
Dodge Planroom
The Hossfeld Bender
Common Challenges With Cable Railing Installations – and How to Overcome Them
2017 Top Job Winners Showcase
Skilled Employment Practices
Financing Acquisition Growth and Profits
Supplier Members
New Nomma Members & Iron Club Members
People
Products
Gargantuan, Pet-Inspired Fountain Center Stage in Canadian Park
Index of Advertisers
O&MM Fabricator - March/April 2017 - cover1
O&MM Fabricator - March/April 2017 - cover2
O&MM Fabricator - March/April 2017 - 3
O&MM Fabricator - March/April 2017 - 4
O&MM Fabricator - March/April 2017 - 5
O&MM Fabricator - March/April 2017 - 6
O&MM Fabricator - March/April 2017 - 7
O&MM Fabricator - March/April 2017 - 8
O&MM Fabricator - March/April 2017 - 9
O&MM Fabricator - March/April 2017 - President’s Letter
O&MM Fabricator - March/April 2017 - 11
O&MM Fabricator - March/April 2017 - 12
O&MM Fabricator - March/April 2017 - NOMMA Network
O&MM Fabricator - March/April 2017 - 14
O&MM Fabricator - March/April 2017 - Nomma Education Foundation
O&MM Fabricator - March/April 2017 - Dodge Planroom
O&MM Fabricator - March/April 2017 - 17
O&MM Fabricator - March/April 2017 - 18
O&MM Fabricator - March/April 2017 - 19
O&MM Fabricator - March/April 2017 - The Hossfeld Bender
O&MM Fabricator - March/April 2017 - 21
O&MM Fabricator - March/April 2017 - 22
O&MM Fabricator - March/April 2017 - 23
O&MM Fabricator - March/April 2017 - 24
O&MM Fabricator - March/April 2017 - Common Challenges With Cable Railing Installations – and How to Overcome Them
O&MM Fabricator - March/April 2017 - 26
O&MM Fabricator - March/April 2017 - 27
O&MM Fabricator - March/April 2017 - 2017 Top Job Winners Showcase
O&MM Fabricator - March/April 2017 - 29
O&MM Fabricator - March/April 2017 - 30
O&MM Fabricator - March/April 2017 - 31
O&MM Fabricator - March/April 2017 - Skilled Employment Practices
O&MM Fabricator - March/April 2017 - 33
O&MM Fabricator - March/April 2017 - 34
O&MM Fabricator - March/April 2017 - 35
O&MM Fabricator - March/April 2017 - Financing Acquisition Growth and Profits
O&MM Fabricator - March/April 2017 - 37
O&MM Fabricator - March/April 2017 - 38
O&MM Fabricator - March/April 2017 - 39
O&MM Fabricator - March/April 2017 - 40
O&MM Fabricator - March/April 2017 - Supplier Members
O&MM Fabricator - March/April 2017 - 42
O&MM Fabricator - March/April 2017 - New Nomma Members & Iron Club Members
O&MM Fabricator - March/April 2017 - People
O&MM Fabricator - March/April 2017 - 45
O&MM Fabricator - March/April 2017 - Products
O&MM Fabricator - March/April 2017 - 47
O&MM Fabricator - March/April 2017 - Gargantuan, Pet-Inspired Fountain Center Stage in Canadian Park
O&MM Fabricator - March/April 2017 - Index of Advertisers
O&MM Fabricator - March/April 2017 - 50
O&MM Fabricator - March/April 2017 - cover3
O&MM Fabricator - March/April 2017 - cover4
http://www.nxtbook.com/naylor/NOMS/NOMS0518
http://www.nxtbook.com/naylor/NOMS/NOMS0418
http://www.nxtbook.com/naylor/NOMS/NOMS0318
http://www.nxtbook.com/naylor/NOMS/NOMS0218
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http://www.nxtbook.com/naylor/NOMS/NOMS0117
http://www.nxtbook.com/naylor/NOMS/NOMS0616
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http://www.nxtbook.com/naylor/NOMS/NOMS0416
http://www.nxtbook.com/naylor/NOMS/NOMS0316
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http://www.nxtbook.com/naylor/NOMS/NOMS0116
http://www.nxtbook.com/naylor/NOMS/NOMS0615
http://www.nxtbook.com/naylor/NOMS/NOMS0515
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