What is Acquisition Finance?

Acquisition finance is funding used to purchase an existing business or its assets. It enables buyers to acquire a business without funding the full purchase price from personal resources, using the target business's cash flow, assets and future earnings to support the debt. It is available as term loans, asset-based lending or leveraged finance depending on deal size and structure. Seven Hills Capital Group works with specialist acquisition finance providers and private credit funds to find the right structure for your business purchase.

You identify a business you wish to acquire and agree a purchase price

The lender assesses the target business's financials, assets and future cash flow

Finance is structured to fund the acquisition — typically covering 50–70% of the purchase price

The balance is funded by the buyer's own capital or vendor finance

Repayments are serviced by the acquired business's cash flow post-completion

Pros

• Enables business acquisition without funding the full purchase price personally
• The acquired business's own cash flow services the acquisition debt
• Leverage amplifies return on the buyer's equity investment
• Structured finance available for complex multi-stage transactions

Things To Consider

• Complex due diligence required on both buyer profile and target business
• Lenders require strong target business financials and sustainable cash flow
• Personal guarantee is typically required from the acquiring director
• Financial leverage increases risk if the acquired business underperforms post-completion

How Seven Hills Capital Group Could Help Your Business

Every business situation is different. The illustrative examples on our case studies page are based on common scenarios we see from UK business owners and landlords - showing how the right finance product, found through a whole-of-market broker, can make a real difference.

How much of an acquisition can I finance?

Lenders typically finance 50–70% of the purchase price for established business acquisitions with strong cash flow. The balance is funded by the buyer's equity contribution and sometimes vendor finance. Seven Hills Capital Group will identify the maximum realistic leverage for your specific acquisition target.

What do lenders look for in an acquisition finance application?

The target business's trading history, EBITDA, cash flow, asset base and customer concentration. The buyer's own financial profile, relevant sector experience and proposed management structure post-acquisition. Seven Hills Capital Group will prepare your application to present all of these elements as strongly as possible.

How long does acquisition finance take to arrange?

Acquisition finance typically takes 4–8 weeks from application to drawdown depending on deal complexity and due diligence required. Seven Hills Capital Group will manage the process and work to the timelines your business purchase transaction requires.

Can I use acquisition finance for a management buyout?

Yes. Management buyouts are one of the most common uses of acquisition finance in the UK. Seven Hills Capital Group works with lenders that specifically specialise in MBO and MBI transactions and understand the dynamics of management-led acquisitions.

Do I need my own capital to fund an acquisition?

Yes. Lenders will not fund 100% of a business acquisition. You will typically need to contribute 30–50% of the purchase price from your own funds or co-investors. Vendor finance — where the seller leaves part of the consideration in the business — can also form part of the equity funding stack.