Management Buyout Funding - MBO Finance Options UK - Apply Online - Fleximize

Management Buyouts

Fleximize can provide the funds to quickly complete the management buyout process

A management buyout (MBO) can prove the perfect solution for both the buyers and sellers of a company. Not only does it offer employees a smooth transition by maintaining company culture, but it also reassures those exiting the business that it’s being left in safe hands. For the MBO team, meanwhile, it’s a prime opportunity to take ownership and drive the company forward.

Management buyouts are not without their challenges, however. There are plenty of pros and cons to weigh up, tax implications to consider, and the deal structure itself needs formulating carefully. Moreover, any management buyout needs a substantial sum of money to cover acquisition costs. It can be hard to find these funds, particularly through traditional sources like a high street bank.

Digital lender Fleximize takes an alternative approach to business loans by helping SMEs access affordable finance on flexible terms. Read on for further information about MBOs, how they work, and how to apply with Fleximize.

What is a management buyout?

A management buyout is a term used to describe the acquisition of a company by internal personnel, whether it’s existing management, non-executive directors, or even employees. The sale of a business to an external company, on the other hand, is referred to as a management buy-in.

The reasons for an MBO vary, but a common one is the retirement of an owner, which can lead to other directors or employees assuming control of the business. Alternatively, a large company may decide to split into smaller parts with regional managers taking over – or “buying out” – their own unit of the business.

Finally, an MBO may be initiated to rescue a business from failure or to build a new company from the remnants of an old one.

The challenges of funding a management buyout

One of the main challenges faced by MBO teams is raising finance. To overcome this obstacle, many businesses will consider approaching a private equity firm. While there are many advantages to this option, it does involve giving up shares to an investor, which can incite opposition from management.

To avoid significantly diluting the management’s ownership, a combination of equity investment, personal capital, and debt finance could be the ideal solution. A business loan, for example, can be used to fund the whole buyout or simply a portion of it without relinquishing control over the company.

Management buyout loans are widely available from a range of sources, including banks and alternative lenders. Many providers, particularly in the traditional finance market, will scrutinize every shareholder's personal circumstances more closely than for other funding purposes, such as cash flow.

A lender might look at personal credit files, the net worth of each individual, and the financial investment they’ve committed personally before approving a loan. In many cases, borrowers will also need to provide personal or company assets as collateral. As a result, securing funding often causes delays in the buyout process.

Management buyouts: The advantages and disadvantages

When implementing a management buyout, it’s crucial to weigh up the pros and cons. There are many financial implications, like the price of completing the deal, as well as impacts on company culture to consider.

The pros

The cons

Management buyout finance from Fleximize

Management buyout funding from Fleximize can provide the capital you need on terms that suit you. We offer both unsecured and secured options across our Flexiloan and Flexiloan Lite products – head to our business loans page for more information. Meanwhile, here’s a quick summary of what we offer:

At Fleximize, we understand that MBOs can be stressful, and the last thing you need is extra paperwork. That’s why we’ve kept our online application quick and easy. You’ll also receive the funds in as little as 24 hours once approved, making our loan products the perfect choice for getting an MBO over the line.

Apply for buyout funding

Check your eligibility for management buyout finance

Our lending criteria is set to accommodate as many small businesses as possible, but there are a few basic requirements that each applicant needs to meet. These include:

All applications that meet our basic eligibility criteria will be assessed on a case-by-case basis. Even if your credit score could be improved, it’s not the only factor we’ll take into account.

How much does management buyout finance cost?

Our interest rates start from 0.9% a month. There are no hidden fees for you to worry about, and our Penalty-Free Promise means you can reduce how much interest you owe if you settle early.

Every management buyout setup is unique. Therefore, your funding package must be tailored to meet your specific needs as a buyer. If you’d like to receive a precise quote for your business, give us a call on 020 7100 0110. Alternatively, our business loan calculator can provide an estimate of how much your loan may cost.

Why choose Fleximize for your management buyout funding?

We’ve helped thousands of customers access the funding they need. Here’s what you can expect when you come to us:

How our management buyout finance has helped others

Fleximize has provided the funding for numerous management buyouts and buy-ins. In the video below, Danny Bloomfield, franchisee for Premier Education Group, explains why he chose Fleximize to help him buy out his business partner.

Buy the way:

Danny Bloomfield used a Fleximize loan to buy out his business partner

Apply for management buyout funding today

We've made it easy to apply for a business loan; simply fill out our quick online form to get started. Unlike other lenders, we only ask for basic information about your business and a few supporting documents, so you can apply in a matter of minutes.

Once you pass our initial checks, your relationship manager will be in touch to guide you through the remainder of the process. And, if approved, you could receive your funds the very same day.