Funding to buy a business
Buying a competitor, taking on a supplier, or buying out a co-owner is one of the fastest ways to grow, and one of the easiest to get wrong on the money side. Acquisition finance is rarely one product. It is a structure. We introduce limited companies and LLPs to lenders who do this kind of deal, and help you shape something that actually completes.
By the CapExpand Team, led by Alex Beardsley
·Updated June 2026
Profit-led
Sized on EBITDA
Weeks
Due diligence takes time
Ltd & LLP
Who we help
No fee
You never pay us
From agreeing the deal to running the business yourself.The short version
A good acquisition is funded by the target itself as much as by you. If the business you are buying makes solid, steady profit, that profit can carry real debt, your own stake covers part of the rest, and a sensible seller leaves some in. Get the structure right and you can buy something far bigger than your bank balance suggests. Get it wrong and you overpay or stall. Talk to us before you sign heads of terms.
What it is
Acquisition finance is the money behind buying a business. That could be a share purchase, where you buy the company, or an asset purchase, where you buy the trade and assets. It also covers buying out a co-owner so you can take full control. In almost every case the funding is a blend rather than a single loan.
The thing nobody tells first-time buyers is how much the target itself does the lifting. Its profits, its debtors and its assets are all part of how the deal gets funded. Your job, with us alongside you, is to build a structure the lender is comfortable with and that still leaves the business healthy after completion.
How a deal is structured
Term loan
Against profitDebt sized on the target sustainable earnings, repaid over a set term from the business cash flow.
Asset-based lending
Against the balance sheetFunding released against the target debtors, stock, plant or property to add firepower to the deal.
Your contribution
Skin in the gameLenders want to see you putting in a meaningful stake. It de-risks the deal and gets better terms.
Deferred / earn-out
Seller stays investedPart of the price paid later, often linked to performance, so less cash is needed on day one.
What lenders look for
Lenders weigh up four things, with the target's profits doing most of the talking:
- ✓The quality and consistency of the target’s profits, since that repays the debt
- ✓The assets that can be secured (debtors, stock, plant, property)
- ✓Your own contribution, or skin in the game
- ✓Your experience and the team running it after completion
As a rough guide, senior debt is often sized at around two to three and a half times the target's sustainable earnings (EBITDA), with the rest made up from your contribution and seller support.
Have the target's accounts ready (two to three years plus recent management figures), the heads of terms or asking price, and a clear first-year plan. Personal guarantees are normal. The government-backed Growth Guarantee Scheme may be in play on some deals, and we can flag whether it is worth a look.
Who it suits
It tends to fit:
- ✓An established business buying a competitor or complementary firm
- ✓A management team buying the business they run
- ✓An owner buying out a co-director
It works best for buyers who can show relevant experience, put in a stake, and target a business with real, provable profits.
A note on who we take on
We currently work with UK limited companies and LLPs only, on a non-regulated basis. We are not authorised by the Financial Conduct Authority. For a deal of this size, take your own legal and accountancy advice too.
How it works
Tell us about the deal
The target, the price, your contribution and a bit about your background. Two minutes on the form or a call.
We shape the structure
We work out a fundable structure and take it to the lenders on our panel who do acquisition deals.
Indicative terms
You get terms to compare. We talk you through the debt, the security and the conditions.
Due diligence and completion
The lender runs its checks, the lawyers and accountants do theirs, and the deal completes. We keep it moving.
Common questions
What is acquisition finance?▼
It is funding that helps you buy a business, whether that is a competitor, a supplier, a complementary firm, or buying out a co-owner. It is rarely one single product. Most deals are built from a mix: a term loan, lending against the target assets or debtors, some money you put in yourself, and often some of the price left in by the seller.
How much of the purchase price can be funded?▼
There is no fixed percentage. Lenders size the debt against the target profits, usually its EBITDA, and against any assets that can be secured. The stronger and more predictable the profits, the more debt the deal can carry. You will normally be expected to put in a meaningful contribution of your own, and sellers often leave part of the price in as deferred consideration.
What is deferred consideration or an earn-out?▼
It is part of the price paid to the seller later rather than on day one, sometimes linked to the business hitting agreed targets after the sale. It reduces the cash you need upfront and keeps the seller invested in a smooth handover. Most well-structured acquisitions use some form of it.
Can I buy a business if I do not have the full deposit?▼
Often, yes, if the target is profitable and the deal is structured well. The target own assets and cash flows can do a lot of the heavy lifting, and a seller who believes in the handover may defer part of the price. The gap between what you have and what you need is exactly the conversation to have with us early.
Is the Growth Guarantee Scheme relevant to acquisitions?▼
It can be. The government-backed Growth Guarantee Scheme supports certain business lending through accredited lenders, and some acquisition lending can fall within it. Eligibility and terms are set by the lender. We can talk you through whether it is worth exploring for your deal.
How long does an acquisition take to fund?▼
Longer than a working capital facility, because there is real due diligence involved. Indicative terms can come back quite quickly, but valuation, legal and financial due diligence and the legal completion usually mean several weeks at least. Starting the funding conversation early, before you are committed, makes the whole thing smoother.
Is acquisition finance FCA regulated?▼
Business acquisition lending to a limited company or LLP for commercial purposes is generally not regulated as consumer credit. CapExpand only introduces limited companies and LLPs on a non-regulated basis and is not an FCA-authorised firm. For a deal of this size you should also take your own legal and accountancy advice.
Does CapExpand lend the money?▼
No. We are not a lender. We introduce UK limited companies and LLPs to a panel of lenders that do acquisition and corporate lending, and we help you shape and compare the options. The lender pays us a commission if a deal completes, never you.
Sources
- British Business Bank, Growth Guarantee Scheme
- NACFB, commercial finance standards
- FCA, when business lending is regulated
- Companies House, checking a target company
Important information
CapExpand Ltd is not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. We work with UK limited companies and LLPs only, for business purposes. We are not a lender and we do not provide financial, tax or legal advice, and we always recommend you take independent legal and accountancy advice on an acquisition. We work with a panel of lenders whose particulars are available on request, and we receive commission from the lender if a deal completes, at no cost to you. All lending is subject to status and the lender's own checks.
Got a business in your sights?
Tell us about the target and the deal, and we'll help shape a structure and find the lenders to back it. Free to use, no obligation, and the earlier the better.