Why Not Use Debt?
Debt’s requirement of principal repayment diverts capital out of your company that could otherwise be used to expedite growth and accomplish management’s objectives.
As an equity provider, Alaris does not require principal repayment. What we do require is an equity dividend distribution (a “distribution”), set in advance, and based on a mutually agreed upon performance metric. The remaining free cash flow of the company is readily available to you, the entrepreneur to fuel growth, provide liquidity, or further corporate initiatives.
Debt payments are fixed and are not sensitive to the potential economic fluctuations of a business.
Alaris’ distribution fluctuates up or down based on the results of your business. Our distribution is set in advance and based on a mutually agreed upon performance metric; which is a “top line” audited financial measure such as same store sales, gross revenue, or gross profit. We call ourselves a “partner” for a reason. We correlate our distribution with the economics of your business to minimize risk, to the benefit of you and your business.
Debt often includes restrictive covenants that can influence a company’s ability to grow, place restrictions on the use of proceeds, as well as limit the amount of proceeds available to a company.
Alaris is a long-term partner. We utilize consent rights and protective covenants to protect our interest but not to limit our Private Company Partners’ growth. We are motivated to grow with you and your business. Alaris has now closed 18 “follow-on” contributions with our Private Company Partners in order to fund growth and to provide liquidity.