It can often be difficult to obtain funding for acquisitions from one of the main High Street lenders; generally, these types of deal do not fit with the increasingly conservative credit policies of the main banks.
And in the current environment, Banks are hard pressed to deal with the flood of business loan applications.
That’s where direct lending comes in. Our specialist advisor has access to a number of institutional lenders who are backed by pension funds, family offices and High Net Worth Investors who have a strong appetite to fund good quality acquisitions, whether they are MBOs, MBIs or part of a buy-and-build strategy.
Typically, most of these deals can be assessed on a cashflow basis, so the lending is dependent on the ongoing cash generation of the business being acquired, rather than being predicated on Balance Sheet asset values. This approach is particularly suited to those businesses that rely more on human capital than machinery or stock volumes for example, businesses that are in the Professional, Consulting or Contracting sectors.
This approach also means that Invoice Finance does not usually need to form part of the funding, reducing the amount of administration and reconciliation required – nor does funding fluctuate depending on whether the business has a good month or not.
“ …….instrumental in helping me achieve the Management Buy Out. We were put in touch at an early stage and they helped structure the deal in order to raise the highest amount of debt. They helped deal with the accountants, solicitors and lenders. I feel as though they held our hand throughout.” RP, Managing Director, Industrial Filtration business, Midlands
“…….a number of acquisitions over the last two years. I have always found their advice to be good. In particular, they haven’t just taken us to the same lenders for every acquisition, but to the lender that suited each business best in the current market conditions. I’m aware that the lenders appetite changes rapidly and I would not have time to keep up with these changes……. our main advisers for debt funding.” GB, professional investor; latest acquisition – Roofing Contractor, South East.
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