Business Acquisition Loans

Our experienced finance brokers help established companies access affordable business acquisition finance of up to £5 million, empowering your business to expand quickly and confidently.

Rates from

7%
£0 Deposit

Please note: We can only secure funding for an established business that you operate through a separate entity.

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What is a business acquisition loan (otherwise known as acquisition finance)?

A business acquisition loan is a type of corporate finance used to buy an established business. Otherwise known as acquisition finance, it is a secure and reliable way to purchase a business when you cannot acquire the funds yourself.

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Please note this is not a quotation for finance, this is for illustrative purposes only. The figures are available to UK incorporated businesses only. The value provided is intended as a guide only. For an accurate quotation please contact us.

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Key features

Usually time-limited so the loan must be used within a certain time frame
Often secured on assets within the business you are acquiring
Will usually be capped at 90% of the acquired business value
Different types of loans are available depending on your needs. These include mezzanine debt and asset-based lending.

Why do businesses make acquisitions?

A business acquisition is a corporate transaction where a business purchases either a portion or all of another organisation’s assets or shares. This is typically done to take control of the business’s current strengths and then build on these to better further it. In doing this, the purchaser may acquire a team of skilled staff, resources and the target business’s clients and reputation. These are valuable assets and can help increase awareness of the buyer’s brand.

How acquisition finance works and what it can be used for

The most popular option for most people looking to purchase a business is a business acquisition loan, and with good reason. If you are looking to purchase an established, viable business, it will come with a realistic value which means less of a risk to a lender.

Acquisition loans can be either secured or unsecured depending on individual circumstances.

Different ways businesses can finance an acquisition

Secured term loan - This is a loan secured against an asset that you own, often your own home. Generally, the interest rates are lower than unsecured loans but secured loans are often a riskier option.
Unsecured business loans - Unsecured business loans might be an option as long as your existing company has a profitable trading history of at least 3 years. Your existing business will apply for the finance and purchase the business, after which, the new business repays the parent company by means of an inter-company loan. Unsecured loans are typically available to a maximum of 30% of your last year's turnover.
Asset-based lending - A flexible funding option for businesses to finance assets within the business you are acquiring.
Private debt - This refers to loans that are usually made by non-bank investors. These commonly take the form of personal loans, credit card debt, or corporate bonds. (Union Business Finance do not provide this type of funding)

The advantages of a business acquisition loan

Individually tailored to suit your needs. There is no one size fits all approach so every application is assessed on an individual basis
High approval rates. Lenders are highly likely to accept you as they can sell assets if you default on the loan. Therefore it is less risky for them.
Stay in control of your business as no equity will be sold to the lender. You will also be able to borrow the money without compromising your own business’s cash flow.

The disadvantages of a business acquisition loan

Puts your assets at risk. This applies to any form of secured lending but is only an issue if you default on repayments.
Longer arrangement times. Unlike our quick loans, an acquisition loan takes longer to process as lenders need to assess the business you are purchasing along with various affordability checks.

Why choose Union Business Finance?

We are trusted by over 4,000 businesses and provide our clients with the best financial advice and solutions for them.
We have over 10 years of experience and a panel of over 100 lenders so we have the best team to direct you to some of the best business loans available.
We will give you a highly personalised, individual and bespoke service entirely catered to the specific needs of your business.
We understand that the best way to help you make important decisions about your business is to be transparent with you. We pride ourselves on building relationships with our clients. Getting to know you, means knowing the best financial solution for you.

Minimum Eligibility Requirements for a Business Acquisition Loan:

The buyer must have an established business with a minimum of 2 years of trading history
The buyer must be a homeowner
The buyer’s business must generate a healthy turnover of at least £150,000 per annum
We can fund the assets of the business being acquired through asset refinance, but only if the assets are tangible equipment
Good business credit score, personal credit score
No default on previous finance repayments

Sorry, You Are Not Eligible If:

You're looking to start a new business for the very first time
You're not a homeowner and cannot provide a third-party guarantor
Your existing business has been trading for less than 2 years
Your business generates less than £150,000 in annual turnover
The business you are acquiring does not have tangible equipment to refinance (e.g. only digital assets or goodwill)

How our business acquisition loans work

We know your time is precious so we make our application process as simple as possible for you.

Step 1: Apply: Tell us about your business. What are your goals? The better we know you and your business, the quicker we can find you a solution.
Step 2: Application review: Once you’ve completed the application, you can hand the rest over to us. We will get back to you as soon as possible but you can rest assured that your application is in the hands of experts.
Step 3: Receive your funds: Once we have approved your application, the funds will be released to you. The rest…that’s up to you!

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FAQs

Who is eligible for a business acquisition loan?

Most lenders require the following:

Two years of trading history from the purchasing business
Existing business must turnover at least £150,000 per annum
Must be a homeowner
Good business credit score, personal credit score
No default on previous payment

Please note:
We can fund the assets of the business being acquired through asset refinance, but only if the assets are tangible equipment.

Sorry, you are not eligible if:

You're looking to start a new business for the very first time
You're not a homeowner and cannot provide a third-party guarantor
Your existing business has been trading for less than 2 years
Your business generates less than £150,000 in annual turnover
The business you are acquiring does not have tangible equipment to refinance (e.g. only digital assets or goodwill)

Is a business acquisition loan secured?

Acquisition finance can be either secured or unsecured and if you have any queries surrounding this, please don't hesitate to talk to us.

How much can I borrow?

We can fund business acquision loans up to

£5m.

in value, and loans are normally capped 90% of the acquisition cost.

Is a business acquisition loan tax deductible?

We are not tax specialists. You’ll have to speak to a tax consultant/ accountant.

Can I use a bridging loan for a business acquisition?

You can indeed.

Do I need a deposit?

Depending on how strong the application is. Majority of our lenders don’t tend to ask for a deposit.

Are there different types of business acquisition?

Yes, business acquisitions depend on a number of factors, therefore there are different types based on those factors. Some may require a loan and we discuss in detail with any applicant on their requirements.

Some types of business acquisition include:

Asset acquisitions
Share acquisitions
Comglomerate acquisitions
Leveraged buyouts
Management buy-outs
Horizontal acquisition
Vertical acquisition

Read more about different types of business acquisition on our blog.

What is a business acquisition loan broker?

A business acquisition loan broker is an intermediary who helps businesses secure financing for purchasing other companies. They work with various lenders to find and arrange suitable loan options, guide businesses through the application process, and negotiate terms to facilitate the acquisition.

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Disclaimer

Aintu Ltd (Registered Company Number: 12139002. VAT Number: GB385130404) T/A Union Business Finance is an independent asset finance brokerage not a lender, as such we can introduce you to a wide range of finance providers depending on your requirements and circumstances. We are not independent financial advisors and so are unable to provide you with independent financial advice. Aintu Ltd will receive payment(s) in the form of commission from the finance provider if you decide to enter into an agreement with them. We work with both discretionary and non-discretionary commission models. Commission payments are factored into the interest rate you pay. Aintu Ltd is an Appointed Representative of AFS Compliance Limited which is Authorised and Regulated by the Financial Conduct Authority FRN: 625035. ICO Registration Number: ZA541243 Aintu Ltd aims to provide our customers with the highest standards of service. If our service fails to meet your requirements and you would like to report a complaint; please click on the link below:

https://www.afsuk.com/asset-finance-solutions/contact/complaints-procedure/

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