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Succession and Recapitalization Loan

A recapitalization strategy is the transfer of company ownership, typically to relatives, employees, management or others. It provides the seller with cash needed to exit while leaving the business in the hands of people who will ensure its legacy and continuity. A planned recapitalization succession transaction can optimize owner economics and buyer opportunities.

Oak Street Funding helps existing owners make well deserved financial exits while positioning future owners for long-term success. Our succession and recapitalization loans allow incoming owners to borrow funds against future cash flows. 

A Phased Approach

Proceeds from a succession/recapitalization loan are used by incoming ownership to begin repurchasing the existing owner's membership interests or stock using a treasury stock approach. Equity is redistributed among succession owners.The loan can be structured as a one-time event or a multiple year transaction and buy-out. As a non-SBA lender, we have the flexibility to work with you to create a customized succession plan. Here is an example, for illustration purposes only*:

Oak Street Funding Succession Loan

 *Based on annual valuation formula and annual loan proceeds tranche. The annual valuation gives opportunity for the seller to derive benefit from the results of the next two years of business production. Buyer, valuation and purchase similar to “dollar cost averaging”. Oak Street Funding does not provide any valuation. Subject to terms and conditions of loan documents being met over payout period.


Get Started

A Succession and Recapitalization Loan from Oak Street Funding can offer new possiblities for sellers, buyers and employees. Contact us today to get started!

Owner Advantages

  • Creates liquidity for owner
  • Allows exiting owner to participate in agency's increasing value
  • Gives owner a say in succession/leadership
  • Delivers environment where owner can stay engaged as long as is preferred
  • Creates opportunity for taxes to be strategically managed

Successor Advantages

  • Creates ability to secure a business loan that might not otherwise be possible
  • Uses business profits to pay off the note instead of personal assets
  • Delivers environment where owner can stay engaged as long as is preferred
  • Can aid in employee retention as employees are more likely to stay if operations remain consistent