Business Acquisition Finance

Access the commercial finance you need to buy a business in the UK

FCA Authorised | Reference: 729876

What is a business acquisition loan?

There are financial products available to those interested in buying a business. Examples include asset finance and leveraged buyouts, the latter being the finance vehicle used by the Glazer family to purchase Manchester United.

These commercial finance solutions enable potential buyers to access the funds necessary to complete the business purchase, without needing to provide the whole amount upfront. Instead, collateral is offered as security against the loan. In certain circumstances, this collateral is provided by the business being purchased, rather than the buyer putting up personal collateral.

Beyond asset-backed lending, acquisition funding can also be structured around the cash flow of the target business or through deferred payments to the vendor. In many cases, the most effective approach combines more than one facility type, depending on the size and nature of the deal.

Our Solutions for Business Acquisition Finance

Mill Wood Finance helps businesses to access finance solutions not available on the high street.

Since 1999 we have been helping UK businesses access the funding they need to complete business acquisitions.

The affordability and suitability for your business will vary greatly depending on a number of factors, including your credit history and business case for the loan application. Sifting through all of the various asset finance solutions on the market isn’t necessarily the best use of your time.

With our network and expertise, we have an intimate understanding of the different options on the market, as well as having enviable connections within the commercial finance industry that enable us to access premier rates on behalf of our clients.

If you are seeking finance to help fund the purchase of a business, we are here to help. Not only do we have access to funding solutions not available on the high street, our team have expertise in writing a compelling business case to submit to the lenders. This business case is a realistic, trusted review of your business strengths and weaknesses that helps the lender to understand your application.

How acquisition finance works

You can use the assets of the business as collateral, helping to secure the finance needed to purchase the business. By unlocking a potential asset finance loan, you can reduce the need for a large upfront investment, and instead spread it over more manageable monthly repayments.
If the business you are looking to purchase has significant accounts receivable, invoice financing can unlock the cash tied up in these unpaid invoices in certain circumstances. This provides immediate liquidity, helping to manage the post-acquisition operational expenses.
If the business has specific equipment that is of high value, you can use asset finance specifically for the acquisition of these assets separate to the purchase of the business as a whole.
If the business has already paid off some of its assets, you could explore refinancing them to release equity, which could be put towards the acquisition cost of buying the business.
Your asset finance repayments may be tax deductible, depending on the financial arrangement. Make sure to receive independent, specialist advice from your accountant regarding this.

Buying a business

Acquiring another business is one of the fastest ways to grow, but the funding behind the deal needs to be structured with the same care as the commercial rationale. Mill Wood Finance works with buyers to make sure that repayment profiles and covenant structures reflect how the enlarged business will actually operate, not just the immediate transaction.

Management buyouts

A management buyout requires a funding structure that reflects the specific circumstances of the deal. The buying team often has limited personal capital, so the facility needs to be built around the strength of the business itself. We work with MBO teams to prepare the financial case and secure lending that supports the transition of ownership without any additional burdens to the business.

What do lenders look for?

Securing acquisition finance depends on how well the opportunity is presented to lenders. Before approaching any funder, it helps to understand what they will assess:

The trading history and financial performance of the target business
Cash flow projections for the combined entity post-acquisition
Buyer’s equity contribution. Most lenders expect buyers to invest between 20% and 40% of the purchase price from their own funds
Buyer’s relevant sector experience and commercial track record
How any new borrowing will sit alongside the buyer’s existing debt position
A credible integration plan showing how the two businesses will operate together

At Mill Wood Finance, we prepare a detailed business case that addresses each of these points in the format lenders expect. This is one of the most valuable parts of what we do. A well-prepared case can be the difference between a declined application and a funded deal.

Even if you are unsure whether your acquisition is fundable at this stage, we can assess the position and give you a clear view of your options before you commit to anything.

How Mill Wood Finance can help you

1: Assess the Deal

We look at the target business, the proposed deal structure and whether the acquisition is realistically fundable before any lender conversations begin.

2: Structure the Funding

We design the right combination of facilities around the specific deal, considering how the enlarged business will operate and what it can service post-completion.

3: Prepare the Business Case

We build a detailed case that covers the commercial rationale for the acquisition and resulting financial projections.

4: Manage the Process

We approach suitable lenders from our network, handle the negotiation and manage the application through to completion.

FAQs

Can you get a loan to buy a business in the UK?

Yes. There are a range of lending products available to fund the purchase of a business in the UK, including term loans, asset-backed lending, cash flow-based facilities and vendor deferred consideration. Even where a buyer has cash reserves available, using external funding can make sense commercially. It preserves working capital for the post-acquisition period and avoids concentrating all of the financial risk in the buyer’s own funds. The right option depends on the nature of the deal and the financial position of both buyer and target. Mill Wood Finance works across these funding types and helps businesses identify which route gives them the best chance of completing the deal on the right terms.

What types of acquisition finance are available?

There are several ways to fund the purchase of a business. The most common include term loans secured against the assets or cash flow of the target business, asset-backed lending against specific equipment or receivables, vendor deferred consideration where the seller agrees to receive part of the purchase price over time, and earn-out arrangements where a portion of the price is linked to the performance of the business after completion. In practice, most acquisitions are funded through a combination of these rather than a single facility. Mill Wood Finance can advise on which combination is most appropriate for your specific deal.

What is a leveraged buyout?

A leveraged buyout is an acquisition funded primarily through debt, where the assets or cash flow of the business being purchased are used as security for the lending. This approach allows buyers to acquire a business without needing to fund the full purchase price from their own capital. The Glazer family’s purchase of Manchester United is a well-known example of a leveraged buyout.

How long does the acquisition finance process take?

It varies depending on the complexity of the deal. A straightforward purchase with a single lender and clear security can move relatively quickly. More complex deals involving multiple funding sources or management buyout structures will take longer. Mill Wood Finance manages the full process and keeps clients informed throughout.

What is the difference between acquisition finance and a standard business loan?

A standard business loan is typically assessed against the borrowing company’s own trading performance and assets. Acquisition finance is different because the lender also assesses the target business and the viability of the combined entity after completion. The overall process is more demanding than a standard loan application, with closer scrutiny of the deal structure, the security being offered and the buyer’s ability to service the debt.

Is Mill Wood Finance regulated?

Yes. Mill Wood Finance Limited is authorised and regulated by the Financial Conduct Authority for its credit broking activities. Our Firm Reference Number is 729876 and can be verified on the FCA register. We have been operating since 1999.

Let's work together for your business acquisition finance requirements

Whether you are planning to buy a business, funding a management buyout or exploring how to structure an acquisition, we are happy to discuss your situation and outline how we can help. You can book a meeting directly using the calendar below, visit us at our Brighton office, call us on 01273 523690 or email [email protected].