Are you looking to finance a Management Buy Out (MBO) or Management Buy In (MBI)?
If so, it is best to involve us at the earliest possible opportunity. We will then be in the best position to negotiate a commercially sound deal and most importantly, one that can be funded.
We can project manage the MBO / MBI from start to finish if needed and are happy to work alongside your existing accountant.
The breakdown of the funding required for your MBO /MBI will be dependent upon your unique circumstances. Funding can be raised across many different platforms but by and large it will comprise of equity, debt and vendor assisted funding in one way or another.
Debt
Business Loans, Peer to Peer Finance, Invoice Finance, Asset Finance, Commercial Mortgage, Contract Finance.
Debt finance is an integral part of any Management Buy Out. The debt is repayable over a fixed term, so it is very important to assess how much debt your business can service before you proceed.
Equity
Management Equity, Business Angels, Venture Capital, Mezzanine Finance.
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This is funding which has the advantage of not having to be repaid in the near future, therefore it is not a debt burden to the future trading performance of the business.
Vendor Assisted
Deferred Consideration or Earn Out
In most cases, the vendor will usually need to defer a proportion of the consideration in order for an MBO to proceed. In some cases, funding offers can be conditional on a proportion of the consideration being deferred.
An earn-out structure may lead to additional consideration being payable to the vendor if the business achieves or surpasses specific financial targets following completion of the buyout.