Business Acquisition Financing – Make the Deal of Your Life
That moment comes rarely. A competitor wants to sell, a subcontractor is available for purchase, or a generational change is due. A business acquisition is one of the biggest decisions in an entrepreneur's career – and financing determines whether it happens.
The opportunity won't wait. Good companies sell fast. Trusty is your AI CFO that helps structure the deal financing. We calculate how the purchase price can be financed with the target's own cash flow and what the optimal ratio of equity to debt should be.
Three thresholds on the path to the deal
In a business acquisition, you're not buying just the past, but future cash flow. Convincing the lender requires watertight calculations.
1. Financing gap (Purchase price vs. Cash)
Few have the entire purchase amount in their account. The equity portion is typically 20–40%. Where does the rest come from? The bank requires collateral, Finnvera guarantees. This puzzle must be assembled correctly.
2. Tight timeline
The seller is often in a hurry or has competing buyers. The financing decision and "Due Diligence" (inspection) must be completed in 2–4 weeks, not months.
3. Integration costs
Names are on paper, but the work is just beginning. System integration, rebranding, and takeover require working capital immediately after the deal. If cash is empty, the new entity sputters at the start.
Trusty's solutions for business acquisitions
The financing model depends on whether you're buying the business or the share capital.
1. Acquisition Loan (Long-term financing)
The primary tool for business acquisition. The loan can often be secured with the target company's assets (e.g., business mortgage) and repayment is based on the target's future cash flow.
Amount: Typically €50,000 – €5,000,000.
Payment period: 3–7 years.
Flexibility: Possibility of repayment holidays at the start, so the takeover proceeds without cash pressure.
2. Bridge Financing (Quick interim solution)
When the deal needs to close now, but final bank financing or investment round is still pending.
Amount: €50,000 – €2,000,000.
Time: 3–18 months.
Benefit: Enables quick action in competitive situations. Bridge loan is paid off (refinanced) when permanent financing package is ready.
AI calculates the deal's profitability
Don't buy a pig in a poke. Trusty helps you understand whether the asking price is realistic relative to financing capacity.
- Payment capacity: Can the target company's cash flow cover loan repayments?
- Collateral gap: Are the target's own collateral (machines, receivables) sufficient or are additional guarantees needed (e.g., Finnvera)?
- Synergies: How does the merger affect combined working capital?