The chance to acquire a new business can be a tremendous opportunity to grow. But, buying a company can require a substantial amount of cash. Then you have to support the working capital needs going forward. For a large, medium-sized or small business, these requirements can strain your financial resources. With Accord’s buyout and acquisition finance facilities, you get the liquidity to make an acquisition and support its growth.
Let Accord help finance your next acquisition or buyout
Our Buyouts and Acquisitions Services
Using our asset-based finance services, the liquidity you need to acquire a business is easy to obtain. Accord can provide buyout and acquisition financing in a simple and smooth solution to facilitate your plans.
Ideal to finance growth, an acquisition, or support a turnaround, Accord’s fast and flexible lending solutions help small and medium-sized businesses (SMEs) manage their critical transactions.Learn More
Maximize your lending power with credit facilities up to $20 million. As an experienced lender, Accord can help you expand your lending power with a loan tailored to your unique needs.Learn More
Whether you’re unlocking cash from equipment you already own or financing new asset acquisition, Accord provides fast, flexible financing solutions to help your business grow.Learn More
Challenges of Buyouts and Acquisitions
There are many challenges when you buy a business. Don’t let financing be one of them. The acquisition and transition to new ownership can involve many day-to-day details, legal agreements, contracts and leases, dealing the employees, goods or services production, customers and many others. Acquisition finance should never be an undue strain. Accord provides simple and easy-to-understand financing based on the assets of the business you are acquiring. This enables you to focus on the opportunities for your business, while we will provide the financing.
Accord’s buyout and acquisition finance facilities are based on the value of the assets; the accounts receivable, inventory, machinery and equipment. We do not rely on financial covenants that may constrain your flexibility in operating the business. We rely on your expertise and the value of your assets.
Frequently Asked Questions
When conducting a leveraged buyout, you are using a significant amount of debt to finance the acquisition of a target business. Typically, using the assets of the company being acquired as collateral for the loans.
Management buyout financing refers to a company’s management team financing the purchase of the company they are currently managing. Often management will structure these acquisitions as a leveraged buyout or partner with a private equity firm to help finance their management buyout.
A leveraged buyout refers to one specific method for structuring an acquisition, where you use significant amount of debt to finance the transaction. A management buyout, which often employs a leveraged buyout structure, refers to the management of a company pooling resources together to acquire the company they currently manage.
Although leveraged buyout structures can vary, they typically use a high debt/equity ratio to leverage your company’s assets.
Leveraged buyout financing is a long-term solution to your acquisition needs. Whereas bridge financing is designed to provide an interim financing option until you can obtain a long-term financing solution.
Leveraged buyout financing is a form of acquisition financing whereby your objective is to use an unusually high degree of leverage to support the transaction. Typically, you use the assets of the company being acquired as collateral for the loans.
If you are looking to expand through a merger or acquisition, you have a variety of options available in order to finance the M&A transaction. In addition to raising equity to support your acquisition, you can leverage the buyout with debt. Debt facilities can include:
- standard operating lines of credit (offered by banks)
- cash flow loans
- mezzanine or subordinated debt
- asset-based loans secured by your accounts receivable, inventory, machinery and equipment
You can use these different types of leverage individually or in combination with one another to finance an acquisition.
When acquiring a business, you need to consider the funding required to complete the acquisition, as well as the funding necessary to support the ongoing operations. Acquisition financing will enable you to leverage the assets or cash flow of the target company, so you can finance the acquisition. Acquisition financing is often structured with a mix of debt, equity and even financing from the vendor via a balance of sale or vendor takeback note.
There really isn’t a standard acquisition financing timeline, because each transaction is unique. However, Accord will work closely with you and your advisors to ensure the process stays on track. In certain circumstances, we have been able to close on credit facilities for M&A transactions in under 4 weeks.
LBO financing rates and fees can vary greatly from one transaction to the next. Typically, leveraged buyout financing rates are based on the level of risk, the type of lender you select, and assets you want to leverage.