A partner exit is a legal and financial event first and a funding question second. This page covers what to settle on paper, and what the business needs in cash afterward.
Apply Now →Before any funding question, you need a clear written agreement. That is a job for your attorney and accountant, not a funder. Typical items to settle are how the departing partner's share is valued, how and when they are paid, what happens to shared debts and co-signed debts, who keeps the customer relationships and whether a non-compete applies. If the business is an LLC or corporation, the governing documents decide a great deal.
We do not give legal or tax advice, and we have no knowledge of your agreement. What follows is about the operating cash around the exit.
| Item | Why it matters for cash |
|---|---|
| Partner's draws or salary | These stop, but so may the work that partner was doing |
| Work the partner handled | Hiring someone to replace it adds a new payroll line |
| Shared credit cards and accounts | Balances and authorizations may need to be separated |
| Customer or vendor relationships | If they followed the partner, revenue may dip |
| Payments owed to the partner | A schedule that looks fine on paper may be heavy in a slow month |
Two co-owners run a landscaping company. One leaves. The remaining owner agrees to pay a fixed amount monthly for two years. The leaving partner also ran estimates and sold most of the large jobs, so the remaining owner has to hire an estimator and may lose a few accounts. In the first six months, the business now carries three new costs: the monthly payment, the estimator's pay and a revenue dip. None of this is unusual, but together it can squeeze cash in the first winter. Invented round numbers in an exercise like this tell you how much cushion to hold, not what any funder will offer.
Working capital supports the running of the business: payroll, supplies, equipment and short gaps in cash. If you plan to use any funding in connection with a partner exit, say so plainly in your application and explain the purpose. Do not assume a particular use fits until you have confirmed it.
Many owners find the first three months after a split are the most fragile. Revenue may dip while new payments and new hires start. Holding a reserve equal to a couple of months of fixed costs, however you arrange it, gives the business room to rebuild.
We fund $25,000 to $5,000,000, funded in as little as 24 hours. FICO 500+ is considered. We typically review about three months of business bank statements and do not require tax returns. The credit pull is soft, the application takes about five minutes, and sole proprietors can apply. The application page is the next step.
No. Use an attorney for the agreement. We cannot give legal or tax advice.
State your situation plainly in the application. About three months of business bank statements are typically reviewed.
The application looks at the applicant's business and credit. FICO 500+ is considered.
Describe the intended use in your application, since our focus here is working capital for the business.
Sole proprietors can apply.
Three months of business bank statements and a 5-minute application. FICO 500+ considered. $25,000 to $5,000,000, funded in as little as 24 hours.
Apply Now →It takes about two minutes and it will not affect your credit score.
No obligation • No impact to your credit score
