The situation
The classic risk is a target with clean bricks-and-mortar but tight cashflow post-completion. Over-lever it and Year 1 becomes a fight against covenants; under-lever and the equity requirement kills the deal.
How we approach it
We build the debt stack lender-by-lender: property mortgage where premises are freehold, asset finance on plant, cashflow term loan on the balance, invoice finance for post-completion working capital. Each lender priced against the piece they're best at.
What that looks like in practice
- Typical debt/equity split 50/50 to 70/30 depending on covenant
- Property mortgage, cashflow term loan, asset finance, IF facility
- SBA/British Business Bank-guaranteed routes where they help
- Post-completion working capital modelled with the acquisition
- Vendor finance / deferred consideration structured where possible
Typical timeline
- Weeks 1-4Combined financial model, debt stack designed, lenders approached in parallel.
- Weeks 4-10Credit committee, due diligence, offers.
- Weeks 10-16Legals, simultaneous completion of debt and share purchase.
Common questions
How much equity do I need?
Usually 30-40% of enterprise value. Vendor deferred consideration and earn-outs can reduce day-one cash.
Can the target's assets secure the loan?
Yes — that's the whole point of asset-backed acquisition finance. Freehold property is the single biggest lever.
Do lenders lend on goodwill?
Some do, up to a limit — cashflow lending is essentially lending against goodwill. Pricing reflects the higher risk.
Send the heads and target accounts
We'll model a workable debt stack in 48 hours so you know what's actually fundable.