On the acquisition trail? Read this first…
When growing your business, or adding new services to your existing offerings, you may be considering acquiring another business. There are many advantages to growing your business through an acquisition including: gaining a larger share of the market and accessing a wider consumer base; cutting costs through combining resources; and accessing funds for new and exciting developments.
It is often said that two companies are more valuable together. Acquisitions can combine and improve the profitability and strength of both companies. Acquisitions can be structured in several ways: you may be acquiring the whole business by becoming the majority shareholder and therefore taking on all the assets and liabilities of the business; or, you could just be purchasing the business assets. A company can also be bought out by its management team, known as a Management Buy-Out (MBO), which can be beneficial as the team will already have a deep knowledge of the business and industry. A Management-Buy-In (MBI) occurs when an outside management team purchases a controlling ownership stake, but leaves the existing management team in place.
When funding an acquisition, it is necessary to secure the right funding solution which will help you take your business to the next level. Invoice finance is secured against outstanding invoices, so the amount of funding grows alongside your business, meaning that you have access to working capital when you need it the most. You can often raise a large chunk of the day one consideration by raising funding through an invoice finance facility, using the target companies’ debtor book to leverage against. Once the acquisition has completed the invoice finance facility will continue to provide you with day to day working capital.
Positive Cashflow Finance has been helping SMEs fund acquisitions for over 10 years. As no two acquisitions have the same requirements, we pride ourselves in offering a personalised and unique service every time.
So, if you’re on the acquisition trail, get in touch today and see how Positive could help get you on your way.