Financing a Business Acquisition: How to Succeed with a Loan
Do you want to take over an existing company? Then you usually need an external financing partner. A loan for the business acquisition is a commonly chosen solution – but the requirements are high. In this article, you will learn how to optimally prepare for the financing discussion and what banks pay special attention to.
Requirements for a Loan to Finance a Business Acquisition
A business acquisition is not financed lightly. Banks carefully assess whether the business model is viable—and whether you, as the buyer, are credible. The following points are particularly important:
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Solid business plan with acquisition strategy
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Third-party business valuation
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Proof of industry experience
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Equity capital (at least 10–20%)
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Personal creditworthiness
Tip: Not sure how much financing you will need? Use our Business Acquisition Financing Calculator for an initial estimate.
Types of Loans to Consider
Bank Loan from Your Primary Bank
The classic route through your own bank—often combined with government subsidies.
KfW Loans
KfW offers special programs for business acquisitions, such as:
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KfW Entrepreneur Loan
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ERP Start-Up Loan Universal (also for acquisitions)
Guarantees and Collateral
If you cannot provide sufficient collateral, you can apply for guarantees through guarantee banks. These significantly improve your chances of receiving loan approval.
Step-by-Step Guide to Financing
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Conduct due diligence on the target company
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Obtain a business valuation
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Develop a business plan
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Determine capital requirements
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Collect initial financing offers
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Prepare thoroughly for the bank meeting
With the Business Financing Calculator, you can assess realistic repayment burdens even before your bank meeting.
Conclusion
With thorough preparation, financing a business acquisition is manageable. Most importantly: demonstrate to the bank that you understand the target company—and possess the necessary expertise to successfully take over.