Contribution
Buyer equity
The amount the buyer or buying group contributes directly toward the price.
How a purchase can be funded
Funding elements that can combine in a larger acquisition
A purchase at this scale rarely relies on one facility alone. The following elements can each play a part, depending on the transaction.
Timing
Deferred consideration and vendor finance
Part of the price paid later, sometimes tied to future performance, with terms agreed between buyer and seller.
External borrowing
Debt finance
Borrowing from a provider, which may sit alongside equity and deferred elements rather than covering the full price.
Existing assets
Target assets and debtor book
Where relevant, assets or receivables already in the target business can support part of the funding structure.
After completion
Post-completion working capital
Funding to support the combined business immediately after completion, separate from the purchase price itself.
Ownership route
Management buyouts
Where an existing management team is buying the business it operates, often combining several of the elements above.
What a provider typically looks at
Because the funding supports the purchase of another business, providers usually look closely at both the buyer and the target.
| Area | What may be reviewed |
|---|---|
| Target accounts and management accounts | The target's filed accounts and more recent management figures, to understand current performance. |
| Profitability and cash generation | How profitable the target is and how reliably it generates cash, since this usually underpins any borrowing raised against it. |
| EBITDA as one possible measure | Some providers may reference EBITDA as one of several measures used to gauge affordability; it is not the only figure considered. |
| Target debt | Existing borrowing within the target business and how it will be treated on completion. |
| Buyer experience | The buyer's or management team's relevant experience in the sector or in running a similar business. |
| Share or asset purchase, at a high level | Whether shares or specific assets are being bought can affect the structure; legal and tax advice should confirm the implications. |
| Forecasts and downside assumptions | Realistic forecasts for the combined business, including how it might perform under more cautious assumptions. |
| Debt-service capacity | Whether the combined business can comfortably service any new borrowing alongside existing commitments. |
| Relevant security | Assets, shares or guarantees that may be requested as security, depending on the provider and structure. |
Practical preparation
What to have ready for a larger acquisition-finance discussion
You do not need every item below before your first conversation. Having as much of this ready as possible can help NBS Finance understand the requirement more quickly.
Transaction overview
The target business, the total price, and the current stage of discussions, including any heads of terms already agreed.
Funding structure so far
How much buyer equity is being contributed and whether any deferred consideration or vendor finance has been discussed.
Target financial information
The target's recent accounts or management accounts, and details of any existing debt within the business.
Buyer background
The buyer's or management team's relevant experience, and details of the buying entity.
Forecasts
A realistic forecast for the combined business, ideally including a downside scenario.
Due diligence status
Whether legal, tax and accounting due diligence has started, and who is advising on each area.
Timescale
The target completion date and any deadline that affects the transaction.
Related reading
Compare related routes
Overview
Business Acquisition Finance
Understand acquisition finance in general terms, including common structures used.
Ownership change
Growth and Acquisition Finance
Explore finance for expansion, acquisitions and ownership changes together.
Management-led
Management Buyout Finance
How an existing management team can fund the acquisition of the business it operates.
Assets involved
Asset Finance
Where the target's vehicles, plant or machinery could form part of the structure.
Debtor book
Invoice Finance
Where the target's eligible unpaid invoices could support post-completion funding.
After completion
Working Capital Loans
Supporting the combined business's day-to-day needs once the acquisition completes.
Tell us about the transaction
Share the target business, the price and the funding discussed so far. You do not need every document before the first conversation.
Usually takes around 4–8 minutes. Completing an enquiry does not commit you to taking finance.