Business funding for acquisitions

Established UK limited companies and LLPs may consider external funding when a commercial event requires cash before the resulting revenue or benefit arrives. Examples include:

• Buying the shares or trade and assets of another established business.
• Acquiring a competitor, supplier, customer portfolio or complementary capability.
• Funding a management buyout, management buy-in or shareholder exit.
• Combining acquisition consideration with post-completion working capital.

These are neutral descriptions, not recommendations. The routes available depend on the company, the transaction and each provider's criteria.

Acquisition term facility

A provider may consider lending against the combined cash generation of the buyer and target, subject to due diligence.

Asset-backed funding

Property, equipment, receivables or other qualifying assets may form part of a provider's security assessment.

Deferred consideration or vendor finance

The seller may agree that part of the price is paid later; this is a transaction term rather than finance provided by Backed.

Working-capital facility

A separate facility may be considered for integration costs or trading needs after completion.

• Heads of terms, purchase price, transaction structure and proposed timetable.
• Buyer and target accounts, management figures and forecasts.
• Quality of earnings, customer concentration and recurring revenue evidence.
• Due-diligence findings, valuation rationale and integration plan.
• Buyer contribution, existing debt and proposed security.

Backed does not determine eligibility or approval. A third-party provider may consider:

• The strength and stability of cash flow across both businesses.
• Purchase-price structure, buyer contribution and leverage after completion.
• Customer, supplier or key-person concentration in the target.
• Due diligence, legal terms, integration risk and the experience of management.

• Agree clear heads of terms before approaching providers for a firm assessment.
• Prepare a combined cash-flow model including debt service and integration costs.
• Explain the commercial rationale and how management will integrate the businesses.
• Allow for professional fees, tax, working capital and a completion contingency.

Clear, current information helps a provider understand the requirement. It does not guarantee that finance will be available or determine the terms offered.

• commercial business funding structures
• how providers set and present pricing
• Business funding for stock
• Business funding for equipment
• Business funding for contracts

Backed may introduce your company to one or more funding partners whose criteria may fit. Providers determine eligibility, approval, pricing and terms.

Submit a funding enquiry

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