Buying a business, without emptying your own.
Acquisition funding is rarely one loan. It is usually a structure — some debt, some deferred, some of your own money — and how it is put together decides whether the deal is comfortable or precarious.
Lenders back the business being bought
What this meansFunding to buy a business, or a share of one. It is usually secured on the assets and future profits of the company being bought rather than on your own. is sized against the target: its profits, its assets and the reliability of its customer base. Lenders commonly work to a multiple of What this meansEarnings before interest, tax, depreciation and amortisation — a rough measure of the cash a business generates from trading. Acquisition lending is typically sized as a multiple of it., and expect the buyer to contribute meaningful equity — typically 20–40% of the price.
Most deals combine sources. A term loan against the trading profits, What this meansPaying for equipment or vehicles over time instead of all at once. The item itself usually acts as the security, so you may not need to put up anything else. released against equipment or vehicles the target owns, What this meansReleasing cash tied up in unpaid invoices. A lender advances most of the invoice value now and settles up when your customer pays. against its debtor book, and deferred consideration paid to the seller out of future profits. Assembled well, that structure needs far less cash upfront than the headline price suggests.
The deals we work on
Owner-managed transactions, typically from a few hundred thousand to several million.
Typically a good fit when
- Buying a competitor, a supplier or a book of clients
- Management buyouts and buy-ins
- Buying out a retiring partner or a departing shareholder
- Acquiring a business alongside its premises
- Refinancing an acquisition already made on expensive short-term money
What lenders will want, and when
Expect three years of accounts for the target, current What this meansYour own up-to-date profit and loss and balance sheet, usually from your accounting software. Less formal than filed accounts, and often more useful to a lender., the heads of terms, and a business plan showing how the combined business services the debt. Personal guarantees from the buyer are usual, and a debenture over the acquired company is standard.
Start the funding conversation before terms are agreed, not after. Deals fall over when the structure is designed around a price that the lending could never support — and that is entirely avoidable.
Questions we are asked most
How much of the purchase price do I need myself?
Usually 20–40%, though a well-structured deal can reduce the cash required by using the target’s own assets and debtor book. Deferred consideration paid to the seller from future profits also lowers the amount needed on day one — and a seller who accepts it is telling you something reassuring about the business.
Can I buy a business with no money of my own?
Very rarely, and usually not on sensible terms. Lenders want the buyer exposed to the same risk they are taking.
What is achievable is reducing the cash needed: asset refinance, invoice finance against the debtor book, and a deferred element paid to the seller can cut the upfront requirement substantially.
How long does it take?
Six to twelve weeks from a serious approach to completion is typical, running alongside your legal and financial due diligence. Property in the deal extends it. Approach a lender before heads of terms are signed and the timetable is far more comfortable.
Looking at a business to buy?
Talk to us before you agree terms — it is the cheapest hour you will spend on the deal.
Or email info@nemekfinance.co.uk · Call 07483 159369
No obligation, no credit check to talk, and a straight answer if finance is not the right move.