Business Acquisition Finance
Business acquisition finance funds the purchase of a trading company or its assets, typically blending a term loan of two to three times adjusted EBITDA with asset-backed lending against property, debtors or plant, plus vendor deferred consideration. Buyers are usually expected to contribute 20%–30% of the consideration in cash, with facilities priced from around 8% to 14% per annum over three to seven years. Lenders back the acquirer's sector experience and the target's earnings quality before anything else — a clean, recurring earnings profile with a management team staying in place raises both the multiple and the gearing available.
Criteria and pricing
What lenders on our panel will typically do on this product today.
- Debt quantum
- 2x – 3x adjusted EBITDA on cash-flow lending
- Buyer contribution
- 20% – 30% of consideration typically
- Rate
- ≈ 8% – 14% p.a. depending on structure and security
- Term
- 3 – 7 years, often with a capital repayment holiday
- Asset-backed top-up
- Up to 70% property, 85% debtors, 70% plant
- Deferred consideration
- Commonly 20% – 40% of price, over 12 – 36 months
- Debt service cover
- 1.4x+ post-acquisition
- Security
- Debenture over target, charges over assets, personal guarantees
- Deal size
- £250,000 – £25m
Worked example — £2.4m acquisition of an engineering business
- Purchase price
- £2,400,000
- Adjusted EBITDA
- £640,000
- Term loan at 2.5x EBITDA
- £1,600,000
- Commercial mortgage on freehold
- £420,000
- Vendor deferred over 24 months
- £280,000
- Buyer cash contribution
- £350,000 including fees
- Blended annual debt service
- ≈ £420,000
- Post-deal debt service cover
- ≈ 1.5x
Figures are typical UK market ranges as at 2026 and are indicative only — your terms depend on the asset, the exit and the lender we place the case with.
Who this works for — and who it does not
You are likely to qualify if
- Sector experience, whether as a trade buyer or a management team buying out an owner
- Three years of target accounts with sustainable, evidenced earnings
- Cash contribution of 20%–30% of consideration
- A handover plan retaining key staff, customers and supplier terms
- Completed or commissioned financial due diligence on the target
This is the wrong product if
- Buyers with no experience of the target's sector and no retained management
- Targets with concentrated revenue — a single customer above roughly 40% is a hard sell
- Loss-making businesses without a funded turnaround plan
- Buyers expecting 100% debt funding with no equity contribution
What actually happens, and when
- Week 1
Structure
We model the debt the target's earnings can genuinely service, before heads of terms are signed at a price the funding will not reach.
- Week 2–3
Lender approach
Cash-flow lenders, asset-based lenders and clearing banks each price the same deal differently; we run the structures side by side.
- Week 4–8
Due diligence
Financial and legal due diligence, valuations on any property or plant, and credit approval.
- Week 8–14
Completion
Facility documents, security and completion alongside the SPA. Three to four months from offer is typical.
Frequently asked
Related funding routes
Request indicative terms
Four details are all a lender needs to price a case: how much, what secures it, when you need it and how it is repaid. Send those and we come back with realistic terms — or tell you plainly that the case will not place.
Request indicative terms
Tell us the four things every lender asks first. We come back with realistic terms, usually the same working day.