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SMEs: how the funds help children who take over the business

2023-11-29T10:08:28.683Z

Highlights: SMEs: how the funds help children who take over the business. "Thanks to the money provided by the fund to the capital of the holding company, it is less indebted to the banks" A significant gain with the rise in interest rates. The fund may also redeem... You have 74% left to discover.Want to read more?Unlock all items immediately.TEST FOR €0.99.Already a subscriber? Log in to your account to see the rest of the story.


What do family-owned SMEs gain by allowing a fund to enter their capital?


The wolf in the sheepfold. This is the image of many executives at the idea of an investment fund taking a stake in their company. This mistrust may give way when one of their children plans to take over the family business and has to finance the operation. Even if the child receives the majority of the securities by gift, it is generally the child's responsibility to compensate his or her brothers and sisters (by paying a balance). In many cases, they will also have to buy out shares from their parents to ensure their lifestyle once they retire.

One solution is to set up a holding company to which the shares of the family SME are contributed. The holding company borrows the amount to be paid to the siblings and parents and repays the loan with the dividends paid by the SME. That's where the funds come in. "Thanks to the money provided by the fund to the capital of the holding company, it is less indebted to the banks. A significant gain with the rise in interest rates. The fund may also redeem...

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Source: lefigaro

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