Funding to buy a business

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

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.

The panel, in numbers

Acquisition debt is assembled rather than bought off a shelf, and the pieces come from different parts of the panel. Secured lending runs to 19 lenders with product limits of £5,000 to £10 million, unsecured to 55 lenders at £1,000 to £20 million, and where the target owns its premises 45 commercial mortgage lenders come into play (checked September 2026). Panel composition changes over time.

At £250,000 unsecured, 35 lenders have a product covering the amount over terms of 1 to 120 months, with published rate floors from 4.1% and a median floor of 14.5% (checked September 2026). On the property leg, published commercial mortgage rates at 70% loan to value run 4.6% to 11.4% with a median of 7.3%, and the median maximum loan to value is 75% (checked September 2026).

Above roughly £1m the field changes character. ThinCats publishes a range of £1m to £30m, terms to seven years, leverage up to four times EBITDA and a maximum 85% loan to value on asset-backed deals, and says over 26% of its first £2bn of lending funded acquisitions. It publishes no rate or fee anywhere, and its own homepage asks advisers rather than borrowers to get in touch. That is normal at this end of the market: pricing is negotiated per transaction. Read on its own site, 7 September 2026.

Two things follow from those numbers. A deal that fits inside £250,000 of unsecured borrowing has a wide field and a fast answer. A deal needing £2m of cash-flow lending has a narrow field, no published pricing to compare, and a timetable measured in months rather than weeks. Knowing which of those you are running changes what you promise the seller about completion.

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 suits a buyer with a track record in the sector and a stake to put in. The target does the rest of the work: two or three years of provable profit is what the lender is really buying, and a business with lumpy or unaudited numbers will be sized on the worst year, not the best.

How it works

Common questions

Sources

• British Business Bank, Growth Guarantee Scheme
• NACFB, commercial finance standards
• FCA, when business lending is regulated
• Companies House, checking a target company