A funding plan for the purchase and the business beyond it
An acquisition can create an opportunity to own, expand or take over a business. The finance needs to support the purchase while allowing the business to meet its obligations and continue trading.
TLA Finance can help you assess the funding requirement and prepare a proposal for relevant lenders. We start with the transaction, the sustainable cash flow and the resources you can contribute.
From Amersham, TLA Finance supports clients in Buckinghamshire, London, the Home Counties and across the UK.
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Any property or asset used as security may be repossessed or otherwise at risk if you do not repay the debt secured on it. Personal guarantees may be required. Borrowing and completion are not guaranteed. Business performance, valuations and transaction costs can change.
What is business acquisition finance?
The term covers funding used towards purchasing a business, its assets or an ownership interest. The appropriate facility can depend on what is being acquired, the available security, the buyer’s contribution and the cash flow supporting repayment.
A purchase by an existing business, a management buyout and a first acquisition by an individual are different propositions. We will establish the details before discussing a lending route.
Asset purchase or share purchase?
The transaction structure affects what changes hands and the obligations being taken on. A share purchase and an asset purchase can have different legal, tax, contractual and security consequences.
Your solicitor and accountant should advise on the appropriate structure and due diligence. A finance proposal does not confirm that the business is worth its asking price or that its liabilities and contracts have been satisfactorily checked.
Look beyond the advertised purchase price
Build a funding schedule that separates the price paid at completion from other costs and any later payments. The business may need working capital immediately after the acquisition, even where historic profits appear strong.
Deferred consideration, seller finance or an earn-out can change the cash required initially but also create future commitments. Their terms must be disclosed to the lender and coordinated with the purchase documents.
Sustainable cash flow supports the borrowing
A lender will want to understand how repayments will be met after completion. Historic accounts are useful, but current trading, customer concentration, margins, working capital and the management plan also matter.
Adjustments to profit need evidence. Consider a realistic cost for replacing a departing owner, any increased rent or salaries, existing debts and the buyer’s required income. Forecast growth should be explained and tested rather than assumed.
Security and personal obligations
Depending on the facility, a lender may seek security over business assets or property, and personal guarantees from relevant parties. The existence of a limited company does not automatically protect a guarantor’s personal assets.
The lender’s security requirements, covenants and restrictions need to be understood alongside the interest rate. Independent legal advice may be appropriate before signing a guarantee or giving security.
A coordinated transaction timetable
An acquisition often involves the buyer, seller, lender, solicitors, accountants and a valuer. Unanswered due-diligence questions or changes to the agreement can affect funding and completion.
We can help organise the lending information and keep finance queries moving. Do not commit to a binding deadline or assume funds are available solely because an initial indication has been received.
What we need to start
A short initial summary is enough to begin the discussion. We will explain our role, any fees and the further information required. Confidential transaction records should be supplied through the secure process agreed with you.
Important information
Any property or asset used as security may be repossessed or otherwise at risk if you do not repay the debt secured on it. Personal guarantees may be required.
Many business-purpose finance arrangements are not regulated by the Financial Conduct Authority. The applicable position must be checked for the case. TLA Finance is a credit broker, not a lender, and does not replace your legal, tax, accounting or valuation advisers. All facilities are subject to lender approval and the final documentation.
Frequently Asked Questions
Can finance cover the entire acquisition price?
It should not be assumed. Available borrowing depends on cash flow, valuation, security, lender criteria and your contribution. Fees and working capital may need separate funding.
Can a management buyout be considered?
We can discuss the proposal and the team’s experience, contribution and business plan. The structure and available facilities depend on lender assessment.
Does a profitable business automatically qualify?
No. A lender will also consider current performance, cash conversion, debt, management, security and the transaction structure. Historic profit alone is not enough.
Can the seller leave some money in the business?
Deferred consideration or seller finance may be possible, but the terms must be disclosed and agreed with the lender and legal advisers. They can affect security and future affordability.
Will a personal guarantee be required?
It may be required depending on the facility and the parties involved. Understand the extent of the obligation and obtain appropriate legal advice before signing.
Can an initial lending indication be relied on for completion?
No. It remains subject to underwriting, due diligence, valuation where required and final documentation. Only the agreed facility and satisfied conditions establish whether funds can be drawn.
Speak to TLA Finance
Review the purchase funding and working capital your business will need after completion.
Discuss acquisition finance
Provide your basic contact details and select your preferred time and method of contact. We will explain the next steps and how to supply supporting documents securely.
Please do not include bank-account numbers, identity documents, credit reports or confidential business records in this general enquiry form.
