Business acquisition finance in Nottingham: how buying a company is funded

Buying a company in Nottingham, whether a competitor on the same industrial estate, a dental practice whose owner is retiring or the firm you have managed for ten years, is paid for from three places at once. This page explains the layers, what a lender reads in the target, what the city's own business register says about the companies changing hands, and the steps from heads of terms to completion. CapExpand is a broker based at Pure Offices in Annesley. We have access to a range of UK commercial finance lenders through our principal, White Rose Finance Group Limited. The lender makes every credit decision.

What acquisition finance is

Acquisition finance is borrowing raised to buy another business or its assets, repaid from the profits of the enlarged group. It differs from a loan for expansion in one respect that changes everything: the money is lent against a business the borrower does not yet run. The lender therefore underwrites two things, the target's record and the buyer's ability to keep that record going, and it asks for the documents that prove both.

How a deal is structured

Senior debt

A term loan from a lender, sized on the target's profits and cash flow and secured on the enlarged group, usually by a debenture over the company's assets and the directors' guarantees. Where the target owns property, the lender may take a legal charge over it as well, or the property is financed on its own as a commercial mortgage.

The vendor loan note

Part of the price left with the seller and paid over an agreed period after completion. It lowers the amount the lender has to advance and keeps the seller invested in the handover. The lender will normally require the note to rank behind the senior debt, so that the seller is paid only while the bank is being paid.

Equity

The buyer's own money, or an investor's. Lenders expect the buyer to have something at risk, and the proportion each lender wants is published in its criteria. Deferred consideration tied to future results, often called an earn-out, sits in the same layer as the vendor note for the lender's purposes.

What the lender reads

Three years of the target's filed accounts and its recent management figures, adjusted for the costs that will change under new ownership; the sale and purchase agreement or the heads of terms; the buyer's accounts and the directors' experience in the trade; and the synergies claimed, which a lender discounts heavily unless they are contracts rather than hopes. Where the target is a professional practice, the lender reads the fee income, the client retention and whether the principal is staying on through a handover. Where it is a trading company, it reads customer concentration, the order book and the working capital the enlarged business will need on day one.

Nottingham, from the register

Nottingham had 9,580 VAT or PAYE registered enterprises in March 2025, down from 9,800 a year earlier (ONS, UK business: activity, size and location 2025, via Nomis dataset NM_142_1, read 8 September 2026). Professional, scientific and technical firms, the accountancy, legal, engineering and consultancy practices that change hands when a principal retires, numbered 1,395. Wholesale and retail numbered 1,635, construction 980, accommodation and food 775 and health 600, which is the dental and veterinary practice market. The ONS bulletin recorded the East Midlands as the region with the biggest percentage decrease in enterprises, 0.6%, which is background a lender reads alongside the target's own accounts.

The British Business Bank's English regions factsheet for 2025 counted 6,579 SME loan and overdraft facilities approved in the East Midlands in 2024, up 41% on the year before and worth £892m. The business funding in Nottingham page sets out the wider picture, and asset finance in Nottingham has a page of its own.

Steps to completion

1. Heads of terms. Buyer and seller agree the price, the structure and the timetable in outline. This is the point to bring the finance in, because the lender's view of the structure can change the heads.
2. The case is checked against published criteria. We read the target, the buyer and the structure against what each lender states it will fund, and set out what each one offers, side by side. You decide where it goes.
3. Credit approval and due diligence. The lender underwrites, and in parallel the buyer's accountants and solicitors carry out financial and legal due diligence on the target.
4. Documents. The facility agreement, the debenture, the guarantees, the vendor loan note and the intercreditor terms that rank the seller behind the lender, alongside the sale and purchase agreement.
5. Completion. The lender draws the senior debt to the buyer's solicitor, the equity is paid in, the seller is paid and the shares or assets transfer. The charges are registered at Companies House within the 21 days Part 25 of the Companies Act 2006 allows.

How the cost is expressed

Senior debt is priced as an interest rate, fixed or variable over a reference rate such as Bank Rate, which the Bank of England has held at 3.75% since 18 December 2025, with an arrangement fee and the lender's legal costs. A vendor loan note carries whatever interest the seller and buyer agree, often none. Each lender publishes its own rate, fee and term for acquisition lending, and they change; we show the costs provided by the lender so you can compare them. The acquisition finance page and the management buyout page go further into the structures.

What a lender asks for

The target's last 3 years of filed accounts and current management figures; the heads of terms or draft sale agreement; the buyer's own accounts and the last 3 months of bank statements; a CV for each director showing experience in the trade; a short plan for the first year of ownership with the working capital it needs; and the source of the equity.

Enquiring does not affect your credit score. If you apply to a lender, it runs its own credit search, which may be recorded on your file. We arrange finance only once a business has traded for 3 months, for amounts from £10,000. We work with UK limited companies and LLPs only, for business and commercial purposes. CapExpand Ltd is a commercial finance broker based in Annesley, Nottinghamshire, company number 14433858.

Sources

1. ONS, UK business: activity, size and location 2025 (24 September 2025), via Nomis dataset NM_142_1, read 8 September 2026
2. British Business Bank, English regions factsheets 2025 (PDF)
3. Bank of England, Bank Rate (3.75% since 18 December 2025)
4. Companies Act 2006, Part 25: company charges
5. Companies House, CapExpand Ltd 14433858