Financing Business Succession – Paths to a Successful Takeover

In this article, you will learn how to professionally finance a succession—whether as an individual (MBI/MBO), a team, or an existing company. With our Succession Financing Calculator, you can immediately explore which loan models are suitable.

What is particularly important when financing a succession?

• The purchase price can be high—often several hundred thousand euros

• Buyers often have little to no equity

• Banks require reliable financial data from the target company

• Transfer models (e.g., earn-out) influence the financing

These financing sources are available

Bank Loan

The classic option. Key factors include:

• The company’s liquidity strength

• The viability of the business model

• The successor’s personal qualifications

Subsidized Loans (e.g., KfW Entrepreneur Loan)

Advantages:

• Low interest rates

• Grace periods without repayments

• Liability exemptions for banks

Therefore: Especially suitable for acquisitions by individuals.

Seller Financing

Part of the purchase price is deferred. Advantages:

• Reduces the equity requirement

• Builds trust with lenders

Equity Participation

Silent partnerships through MBG or other investors complement debt financing—without direct control rights.

Guarantees

If collateral is lacking, guarantee banks step in—often covering up to 80% of the loan amount.

Structuring Financing – Combination is Key

A realistic structure:

• 60–70% bank loan (possibly with subsidies)

• 10–20% seller financing

• 10–20% equity or participation

Therefore: Test your financing options now with the Succession Financing Calculator

Conclusion

Business succession is a great opportunity—if the financing fits. Combine traditional loans, subsidies, and complementary components for a sustainable solution.