How Do I Finance the Acquisition of a Company?

How Can a Business Acquisition Be Financed?

The sale or purchase of a business is a complex transaction that requires solid financing. There are various financing options that can be used individually or in combination to cover the purchase price. The most common methods are presented below.

What Role Do Bank Loans Play in Financing?

Bank loans are one of the most common forms of financing in business acquisitions. Banks typically finance up to 60% of the purchase price, depending on the company’s profitability and the buyer’s creditworthiness.

Repayment usually takes place over five to seven years from the company’s free cash flow. This option is particularly suitable when stable revenues are expected. For more details on traditional financing options, see the firmenzukaufen.de guide.

What Is a Vendor Loan and When Is It Used?

A vendor loan is a flexible way to close a financing gap. The seller grants the buyer a portion of the purchase price as a loan.

This is often used when equity and bank loans are insufficient. It demonstrates the seller’s confidence in the buyer and the business. The Nachfolgeportal Schweiz provides a comprehensive overview of this and other financing types.

How Does an Earn-Out Agreement Work?

In an earn-out agreement, part of the purchase price is tied to the future performance of the business. The buyer initially pays a fixed amount, with further payments based on revenue or profit targets.

This method reduces the buyer’s risk and creates incentives for the seller to hand over the business in good condition. The Raiffeisen Bank offers detailed information as part of its succession advisory services.

What Are the Advantages of Crowdfunding via Platforms Like Collin Crowdfund?

Crowdfunding is a modern alternative to traditional financing. Platforms like Collin Crowdfund enable medium-sized companies to raise capital from private and professional investors.

This option is particularly attractive for companies owning real estate, as land charges can serve as collateral. The success rate exceeds 99%, making crowdfunding a reliable solution.

How Can Subsidized Loans Help?

Subsidized loans from institutions such as KfW Bank offer favorable terms and are specifically tailored to medium-sized companies. They are ideal for acquisitions or succession arrangements.

Regional development banks also offer specific programs designed to meet the needs of smaller businesses.

What Does the DFKP Platform Offer for Business Financing?

The DFKP platform provides customized financing solutions through a network of over 200 financiers. Particularly interesting is the purchase financing, which allows goods or materials to be financed without using equity.

A personal advisor assists in developing individual solutions, making this platform especially flexible.

What Role Does Equity Capital Play in Financing?

Equity capital often forms the foundation of any financing. It not only demonstrates the buyer’s commitment but also reduces the risk for other lenders.

A high equity ratio facilitates access to loans and improves terms.

Conclusion: What Is the Ideal Combination?

The optimal financing for a business acquisition usually consists of a combination of different options:

• Equity capital as the foundation
• Bank loan for the majority of the purchase price
• Vendor loan or earn-out to close gaps
• Subsidized loans or crowdfunding as supplements

Each transaction should be planned individually to achieve the best results.