Financing
Funding your business acquisition
The right funding structure depends on the business, the transaction and your own resources. This guide explains the common routes, what lenders look for, and how we help you prepare for productive conversations with finance providers.
Finance options
Common ways to fund a business purchase
Most acquisitions combine more than one source of funding. The mix will depend on the price, the business's profits and assets, and what the seller will accept.
Your own capital
Most acquisitions involve some personal or company funds. Lenders usually expect the buyer to contribute to the purchase, and the amount you can commit shapes what else is available.
Bank and specialist lending
Term loans from high street banks or specialist acquisition lenders, typically assessed against the target's historical profits and its ability to service repayments after completion.
Asset-based finance
Borrowing secured against assets in the business, such as receivables, equipment, stock or property. It can suit businesses with a strong asset base.
Deferred consideration
Part of the price is paid to the seller after completion, sometimes linked to performance through an earn-out. This reduces the up-front funding need and keeps the seller invested in a smooth handover.
Vendor finance
The seller agrees to lend part of the price, repaid over an agreed period. It signals confidence in the business and is often combined with other funding.
Equity partners
Investors who provide capital in exchange for a shareholding. More common in larger transactions or where a buyer wants a partner alongside them.
Lender criteria
What finance providers typically look for
Every provider has its own criteria, but most assessments cover the same ground. Preparing for these questions early makes conversations quicker and more productive.
- Consistent, verifiable trading history and profitability
- Cash flow that comfortably covers repayments after the acquisition
- Your relevant experience and plan for running the business
- The size of your own contribution
- Quality of financial information: accounts, management figures and forecasts
- Security available, and the overall structure of the deal
Deal structure
How funding shapes the offer
A well-structured offer balances what you can fund on day one with what the seller needs. Deferred payments, earn-outs and vendor loans can bridge a gap between price and available finance, while giving the seller confidence the business is in capable hands. Sellers often weigh certainty of funding as heavily as headline price.
How we help
Our role as your adviser
We support buyers from early funding questions through to completion.
1. Funding readiness
We help clarify the likely capital requirement, your contribution, affordability and the information a lender will expect to review.
2. Structuring the proposal
We help you consider how external finance, your own capital and any deferred or vendor consideration could work together in a credible offer.
3. Finance introductions
Where finance is required, we can introduce you to suitable lenders and funding specialists based on the size, structure and circumstances of the acquisition.
4. Through to completion
We coordinate with lenders, your legal and accounting advisers and the seller so that funding and due diligence progress together.
Finance remains subject to provider assessment and approval. We support the process; we do not guarantee funding or provide regulated financial advice. You should take your own independent financial, legal and tax advice before committing to any borrowing.
Planning an acquisition?
Register your acquisition criteria and funding position, and we will be in touch to discuss suitable businesses and finance routes.