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What are UK business acquisition loans?
A business acquisition loan is a type of financing that allows you to buy out existing owners or shareholders from a business.
An acquisition loan is used to purchase all or part of a company’s assets or shares. These loans can be sought from various finance providers, such as secured and unsecured term loans, mezzanine debt, and asset-based lending.
New businesses popping up in the UK are increasing by 6.4% per year over the years. This showcases the growth of entrepreneurial spirit and an active market for business acquisitions in the UK.
As an alternative finance provider, our award-winning service can help you get a business acquisition term loan in as little as 24 hours. Read on to explore your options and how they work.
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Receive your funds
What are UK business acquisition loans?
A business acquisition loan is a type of financing that allows you to buy out existing owners or shareholders from a business.
An acquisition loan is used to purchase all or part of a company’s assets or shares. These loans can be sought from various finance providers, such as secured and unsecured term loans, mezzanine debt, and asset-based lending.
There has been a big increase of 6.4% in new businesses in the UK compared to last year, which showcases the growth of entrepreneurial spirit and an active market for business acquisitions in the UK.
As an alternative finance provider, our award-winning service can help you get a business acquisition term loan in as little as 24 hours. Read on to explore your options and how they work.
How does a business acquisition loan work?
Whether you or your company are seizing an exciting new opportunity or being a hero and rescuing a failing business, you may need to source the funds quickly to make your dreams a reality.
You might be in the position of buying out a shareholder, part of a team buying out the company’s existing owner, or a third party looking to buy. Whichever scenario you are in, we’re here to help.
Sourcing funding can help cover the buy-out costs, including:
Professional and legal fees
Advice from an accountant
Restructuring costs
Property costs
The completion payment (which is an upfront payment)
The deferred consideration, which are the payments made after the acquisition
Transaction fees
And other associated costs
If Fleximize approves your funding, we'll work with you to create a loan package tailored to your circumstances. Together, we'll talk through your options and outline the terms of your loan and interest rates so you’re satisfied with your repayment schedule.
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What are the different types of business acquisition loans?
Every business acquisition is different, and that’s why there are several funding methods to consider when researching the best approach to acquiring a new business. We’ve made it easy for you and outlined all four funding options below.
Secured term loan
A secured loan is an ideal choice if the costs associated with taking ownership of a business are high. With Fleximize, you can apply for finance up to £500K.
Secured business loans allow you to borrow more with a lower interest rate. But the lender will require you to offer something as ‘security,’ usually company or personal assets such as a property or equipment. Your assets will need to be worth more than the loan amount requested. It isn't abnormal to see 65%- 70% of the asset value being lent for commercial assets. Personal property may accommodate a higher loan-to-value ratio (LTV), such as 80-85%. Both of these assume there is no finance already against these assets.
If you’ve got a great team behind you and you all have the same passion for success, then being able to borrow more with longer repayment terms will allow you to hit the ground running.
If you’re interested in this funding, read more about Fleximize’s secured loans here.
If you want to know more about how we can support your business, give our friendly team a call and you'll get straight through to someone who can help, like Macauley. Or, if you're ready to apply, get started by clicking the button below.
0207
100 0110
Mezzanine debt
Mezzanine debt sits between equity and a senior finance line. It comes into play when you can't raise enough equity to fund the gap. Equity can be raised by selling shares in your business to investors, or it can be funded with your own cash. Just remember there are no guarantees when funding equity as it typically will only be repaid on the sale or closure of the business if there is enough money left, though it can be structured to pay yearly dividends when the business is doing well. This loan type isn’t suited for every business, but it might be for you if you just need that final bit of money to seal the deal.
Asset-based lending
Asset-based lending is another alternative to traditional banking finance. In this option, the borrower's assets decide the loan amount. When determining eligibility, the lender normally considers accounts receivable, inventory, equipment, or property.
Similar to term loans, asset-based lending lets companies spread the cost of an asset over several months or years, allowing businesses to protect cash flow while transitioning to the new owner. Like all types of finance, asset-based lending has pros and cons, but it depends on your individual circumstances to decide your best approach.
Unsecured business acquisition loans
This will be your ideal solution if you need to complete the buy-out quickly. Fleximize offers unsecured business loans that support an acquisition, ranging from £10,000 to £250,000.
These loans are more accessible for businesses as they don’t require any company or personal assets as security and are much quicker to process. While the loan sizes will be smaller, they are quicker and more convenient. Their convenience makes them a great choice if you need fast funding.
Use our business loan calculator below to determine your monthly repayments and term lengths for our business loans.
How do I apply for a business acquisition loan with Fleximize?
Our loans have many flexible features. Whether you want to buy someone out, expand into a new geographical area, diversify your products and services, or access new but established audiences, we’re here to fund your ambitions.
Our application process takes five minutes, so what are you waiting for? Grab a cuppa and see how we can help. If approved, you can receive your funds in as little as 24 hours. Or if you want to discuss your options with our first-class customer service team, call them on 020 7100 0110.
Your common questions answered
Many SMEs fund acquisitions through different financing methods. The options are secured term loans, mezzanine debt, asset-based lending, and unsecured term loans.
Yes, absolutely. You can borrow the full amount, or if you or your company have saved money to put towards the buy-out, we can top you up to reach the full amount.
It takes five minutes to complete our application form. Then you’ll receive a decision as soon as we can. With the funds landing in your account 24 hours after approval.
Our interest rates start at 0.9% per month. Compare business loan rates with our comparison tool here.
Do you have a question that you can't see? Check out our FAQ page.
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