Acquisition Finance: Funding the Purchase of a Business
Acquisition finance helps fund the purchase of an established business, management buyouts and growth by acquisition. Because no two acquisitions are the same, funding is often structured using blended facilities designed around affordability, deposit and cashflow. Wise Commercial Finance Limited supports business buyers with lender access and clear guidance through the acquisition process.
Quick Facts
What it is
Funding to buy a business or acquire assets
Best for
Business purchases, management buyouts, growth by acquisition
Typical terms
12–120 months (varies by lender and structure)
Typical amounts
£50,000 to £5,000,000+
Speed
Depends on deal complexity and diligence
Security required
Depends on the deal and lender
Repayment type
Structured repayments, often blended facilities
What is acquisition finance?
Acquisition finance is commercial funding used to purchase a business, complete a management buyout (MBO), or acquire assets from another company. It can be structured as a single facility, but more commonly involves a blended package. This could be a term loan plus working capital support, or a combination of lending and asset finance.
Because acquisitions involve both the buyer and the target business, lenders usually assess:
- The profitability and stability of the business being purchased
- The buyer’s experience and ability to operate the business
- Affordability (the target’s cashflow and the buyer’s overall position)
- Deposit and security
- The proposed structure of the deal
What you’ll usually need
- Deal summary and purchase structure
- Accounts for the target business (typically 2–3 years if available)
- Management information or forecasts (where relevant)
- Buyer background and experience
- 3–6 months bank statements and supporting financial information
- Details of any deposit or additional security
Common acquisition finance structures
Acquisition finance is often tailored depending on the deal. Common structures include:
Term loan facility
A fixed repayment loan used to fund the purchase price.
Blended finance
A combination of term lending, asset finance (where assets are involved), and potentially working capital to support the transition.
Working capital support
Additional funding to help manage cashflow during the acquisition period, staffing changes, stock, or contract delivery.
The right structure depends on affordability and the target business’s performance.
Costs & pricing
Acquisition finance pricing depends on:
- The strength of the target business (profitability, stability, customer base)
- Affordability and how repayments are supported by cashflow
- The buyer’s experience and track record
- Deposit and security
- Deal complexity and structure
There may also be costs related to:
- Lender arrangement fees
- Legal and due diligence costs
- Valuation costs (where applicable)
Wise Commercial Finance Limited focuses on sustainable repayment structures that make commercial sense, not just maximum borrowing.
How acquisition finance works
1
You provide a deal summary, purchase price and funding requirement
2
We review affordability and outline realistic funding structures
3
We approach suitable acquisition lenders from our panel
4
Lender underwriting, diligence and approval process begins
5
Completion occurs and funds are released
Worked examples (estimates)
Example 1 — Buying a small service business
Funding structured with fixed repayments to purchase a profitable established business, with repayments aligned to affordability.
Example 2 — Acquisition with assets included
A blended package combining acquisition lending with asset finance to support equipment requirements while keeping repayments manageable.
Example 3 — Larger acquisition with working capital support
Funding structured to include the purchase price plus additional working capital to support the transition and early-stage trading.
Eligibility
Acquisition finance may suit:
- Owner-managers buying a business
- Management teams completing an MBO
- Established businesses acquiring competitors
- Buyers with relevant experience and a clear affordability case
Lenders typically require a strong rationale for the acquisition and confidence that repayments are sustainable.
Benefits and alternatives
Benefits
- Enables growth by acquisition
- Funding can be structured around cashflow
- May include working capital support
- Allows a buyer to purchase an established trading business
Alternatives
- Vendor finance
- Earn-out structures
- Equity investment
- Smaller staged acquisition approach
- Asset-only purchase instead of full acquisition
Frequently Asked Questions
How much deposit is usually required for acquisition finance?
How much deposit is usually required for acquisition finance?
Deposit requirements vary depending on the lender, the target business and the deal structure. Some lenders expect a meaningful deposit to demonstrate commitment and reduce risk, while others may consider lower deposits if the business has strong profitability and security is available.
We can advise on realistic expectations based on your deal, sector and affordability.
Can I buy a business with no money down?
Can I buy a business with no money down?
It is sometimes possible to structure an acquisition with limited upfront capital, but it depends on the strength of the deal and whether alternative structures are available, such as vendor finance, earn-outs, deferred consideration, or security-backed lending.
Most lenders look for evidence of buyer commitment, affordability and a sustainable repayment plan.
Can working capital be included in acquisition finance?
Can working capital be included in acquisition finance?
Yes. In many acquisitions, working capital is critical for maintaining trading stability during the transition. Some lenders may include additional working capital funding as part of the overall package, depending on affordability and business performance.
We can help structure a facility that supports both the purchase and the early-stage trading period.
What security is required for acquisition finance?
What security is required for acquisition finance?
Security depends on the lender and deal structure. It may include:
- Business assets
- Personal or business property (in some cases)
- Guarantees
- debentures or fixed and floating charges
- Assignment of receivables or other protections
Some deals may be unsecured, but this typically depends on profitability, affordability and risk profile.
How long does the acquisition finance process take?
How long does the acquisition finance process take?
Acquisition finance usually takes longer than standard business lending because it involves due diligence, review of the target business and the legal completion process. Timescales vary, but factors include:
- How quickly accounts and documentation are provided
- Deal complexity
- Legal timelines
- Lender underwriting requirements
If you have a deadline, we can help prioritise lenders and structure based on speed and feasibility.
Can first-time buyers get acquisition finance?
Can first-time buyers get acquisition finance?
Yes, but first-time buyers may face tighter criteria. Lenders often consider:
- Relevant management experience
- The strength of the target business
- Affordability and sustainability of repayments
- Deposit and security
If you’re a first-time buyer, the strongest approach is usually to present a clear plan, realistic projections and evidence of experience relevant to the business being purchased.
What documents do I need for acquisition finance?
What documents do I need for acquisition finance?
Common documents include:
- Accounts for the target business (often 2–3 years)
- Management accounts (if available)
- Deal summary and purchase structure
- Buyer CV/experience profile
- Forecasts (where relevant)
- 3–6 months bank statements
- Proof of deposit and source of funds (where applicable)
We will help you prepare the information so the lender can assess the deal efficiently.
Is acquisition finance the right option for me?
Is acquisition finance the right option for me?
Acquisition finance is suitable when you are buying an established business and want structured funding aligned to cashflow. However, other options may be more appropriate depending on the deal, including vendor finance, equity investment, earn-out structures, or blended finance approaches.
We can help you explore realistic options and structure a package that makes commercial sense.