Acquisition finance

Acquisition finance is debt or other capital raised specifically to fund the purchase of a company, business or asset. It is typically sized against the cash flows and assets of the target and the acquirer, and may combine senior secured debt, mezzanine or subordinated layers and equity. Repayment usually comes from the combined business after completion.

Arranged alongside buy-side M&A processes, leveraged buyouts and corporate acquisitions.

Acquisition finance is raised for a specific purchase and sized against the combined cash flows and assets of the target and the acquirer, often layering senior secured debt, mezzanine and equity. A general corporate loan funds ordinary operations and is underwritten on the borrower’s existing business alone.

There is no fixed rule: lenders size acquisition debt against the combined business’s cash flows, asset backing and resilience. Stronger, more predictable cash generation supports more leverage; whatever debt will not cover must come from mezzanine or subordinated layers, structured capital or the buyer’s own equity contribution.