We recently invited Joanna Oakey, director of Aspect Legal on a webinar on the topic ‘Acquiring A Business’ and we had a question come through, ‘how to fund an acquisition?’
Here’s what she said -
There's a number of ways that you can fund it. You can fund it from your own investors into the business. You need to make sure that you have the right investor agreement, shareholder agreements, unit holder agreements, and the owner agreements in place.
Another way is taking finance against the business itself. There's certain industries and certain amounts of finance where you potentially can get 100% finance. Medical practices, dental practices, veterinary practices are examples of businesses where you can quite often get a full 100%.
Accounting practices, Legal practices, are types of businesses where you can potentially get 100% funding from banks, financiers, or traditional financiers. If you can get 100% funding, you're not putting cash in, and then you've acquired something that gives you an immediate uplift.