If you are thinking of doing a management buy-out or buy-in, then you will need to find the funding to acquire the business. There are a variety of funding options available to enable a management buy-out or buy-in which include secured loans, asset-based loans, invoice finance and commercial mortgages. Below we have explored what options are available.
The table below gives a quick comparison of the top UK providers for management buy-out financing.
|Company||Minimum amount||Maximum amount|
|Bank of Ireland||Not stated||£10 million+|
|Yorkshire Bank||Not stated||Not stated|
|Aldermore||Not stated||Not stated|
|Bibby Financial Services||Not stated||Not stated|
|IGF||Not stated||Not stated|
|Nucleus Commercial Finance||£25,000||£150,000|
|rebuildingsociety com||£25,000||Not stated|
|Ultimate Finance||Not stated||£5 million|
* The facts and figures included here come from each company’s website and were accurate at the time of writing (October 2019) but may have since changed. Also, please keep in mind these may not be apples to apple comparisons as each provider offers different solutions. This guide should be used as a starting off point for more research on your part.
Below we profile each of the companies’ services and features in a bit more detail.
Note companies are ranked in no particular order and this no way indicates one solution is better than another.
1. Bank of Ireland
Some of the features and benefits of the Bank of Ireland’s management buy-out financing.
- Management Buy-out finance
- Team of sector experts
- Support businesses through the application process
- Loans over £10 million available
- Loan terms up to 5 years
- Security required
- Maximum bank finance may apply
- Own equity can be required
- Business valuation required
- Experienced provider
Bank of Ireland is a banking institution that operates in Ireland and offers a range of business finance products. They provide finance to a wide range of businesses including established businesses and start-ups as well as supporting businesses through a management buy-out.
Bank of Ireland’s Management Buy-out finance is provided by a team of sector experts who have knowledge from working in businesses and they are available to help you through the application process. They offer loans in excess of £10 million and they may require you to have your own equity. They will require you to provide security and you will need a business valuation.
2. Yorkshire Bank
Some of the features and benefits of Yorkshire Bank’s management buy-out financing.
- Corporate and structured finance
- Suitable for a management buy-out, acquisition and refinancing
- Flexible finance
- Term debt and working capital finance
- Choice of financing solutions
- Can quickly put together funding
- Loans are subject to security and business valuation
- Have branches throughout the UK
- Available to UK based businesses
- Specialist teams to support businesses
Yorkshire Bank is a UK banking establishment that offers a range of business finance which includes loans, overdrafts, credit cards, commercial mortgages, asset and invoice finance. Their loan range includes corporate and structured finance that are available for a management buy-out, acquisition, recapitalisation and refinancing.
Yorkshire Banks’s management buy-out finance is available as flexible finance which includes senior cash flow lending, asset-based lending and working capital solutions. They don’t state how much you can borrow but it will be subject to security and a valuation of the business. To be eligible for this loan your business needs to be based in the UK.
Some of the features and benefits of Aldermore’s management buy-out financing.
- Provides finance to support a management buy-out
- Choice finance products
- Use unpaid invoices as borrowing leverage
- Commercial mortgages
- Leverage the value of unpaid invoices to provide finance
- Commercial mortgages that require a 25% deposit
- Flexible payment terms
- Bespoke loan terms are available
- Assistance to secure adequate funding
- Works for a variety of management buy-out scenarios
Aldermore is a financial provider who is described as being one of the leading alternative banks. They offer a variety of business funding products which are available to small to medium-sized businesses which include asset finance, invoice finance, construction finance, contracts finance and trade finance.
Aldermore offers a range of management buy-out finance and support which includes using the value tied up in unpaid invoices to leverage finance and commercial mortgages to purchase the premises. They will assist you to find secure and adequate funding that can offer flexible payment terms and bespoke loans depending on the value of the loan required.
4. Bibby Financial Services
Some of the features and benefits of Bibby Financial Services’ management buy-out financing.
- Asset-based Lending
- Choice of financing solutions
- Invoice finance
- Trade finance
- Stock finance
- Asset finance
- Cash flow loans
- Commercial mortgages
- Offers a personalised approach to finance
- Available to businesses with a turnover of over £5 million
Bibby Financial Services is an independent financial provider that offers a broad range of business finance solutions. Their finance products include a wide range of loans, hire purchase, debt protection and specialist products. They offer asset-based lending to those who are wanting to do a management buy-out or buy-in and it is available to businesses that have a turnover of over £5 million.
Bibby Financial Services Asset-based Lending offers a choice of financing solutions which includes invoice finance, trade finance, stock finance, asset finance, cash flow finance and commercial mortgages. They can structure their loans to meet your needs and support you financing your management buy-out.
5. Calverton Finance
Some of the features and benefits of Calverton Finance’s management buy-out financing.
- Invoice Finance
- Suited to acquisitions and management buy-out
- Choice of financing options
- Release cash flow
- Credit control facilities
- Bad debt protection
- Invoice factoring
- Invoice discounting
- Short-term finance
- Available to a range of industries
Calverton Finance is a financial provider that offers a range of finance products that help businesses to release tied up funds. Their product range includes invoice finance and short-term finance which can be used to fund management buy-out.
Calverton Finance’s invoice finance offers a choice of financing options which includes invoice factoring, invoice discounting and short-term finance. Their invoice factoring and discounting allows you to release funding that is tied up in unpaid invoices, each of these offers different levels of credit control and confidentiality. Short-term finance offers loans from £25,000 to £500,000 on terms from 3 months.
Some of the features and benefits of Fleximize’s management buy-out financing.
- Business loans suited to a management buy-out
- Loans from £5,000 to £500,000
- Terms from 1 to 48 months
- No hidden fees
- No early repayment fees
- Quick and simple application process
- Interest is charged on the reducing balance, not the full loan amount
- Can top-up the loan
- Repayment holidays available
- Designed for SMEs
Fleximize is a financial provider that specialises in offering financial products to small to medium-sized businesses. They offer loan products that are quick and simple and have been designed for a variety of loan purposes which includes management buy-out.
Fleximize’s business loans charge interest only on the balance of the loan and not the full loan amount throughout the loan term. This flexible loan allows you to top-up the loan when needed and take repayment holidays. Loans are offered from £5,000 to £500,000 for terms from 1 to 48 months. It is a transparent loan with no hidden fees or early repayment costs.
Some of the features and benefits of IGF’s management buy-out financing.
- Finance for acquisition, management buy-in or buy-out
- Choice of financing products
- Invoice discounting
- Asset Based Lending
- Release the funds tied up in unpaid invoices
- Utilise the business’ assets to unlock funds
- Versatile finance solutions
- Revolving funding line
- Access up to 90% of your invoice values
- Dedicated support team
IGF is a financial provider that offers specialist business finance products which include invoice finance and asset-based lending solutions. They have designed their products to cater for small to medium-sized businesses.
IGF’s invoice finance includes discounting and factoring but discounting is suggested as a solution for a management buy-out. Invoice discounting offers a revolving funding line that offers up to 90% of the unpaid invoices but allows you to keep it confidential. Their asset-based lending is a versatile finance solution that allows you to access funding from your inventory, plant, machinery and property which is ideally suited to acquisitions and management buy-out.
8. Nucleus Commercial Finance
Some of the features and benefits of Nucleus Commercial Finance’s management buy-out financing.
- Cash Flow Finance loan
- Suitable for a management buy-out
- Borrow from £25,000 to £150,000
- Loans from 3 months to 3 years
- Unsecured loans
- Online application
- Receive funding from as little as 24 hours
- Designed to be a hassle-free loan
- Offers a range of finance products
- Businesses need to have been operating for over 3 years
Nucleus Commercial Finance is a financial provider that offers a variety of business finance solutions such as loans, cash advance, property finance, invoice finance and asset-based lending. Their cash flow finance loans are available to those who want to make a management buy-out.
Nucleus Commercial Finance’s cash flow finance provides a hassle-free loan from £25,000 to £150,000 for terms from 3 months to 3 years. This loan is an unsecured loan that provides fast access to funding with a simple online application form and process, and they offer the ability to received funding after the decision within 24 hours.
Some of the features and benefits of rebuildingsociety.com’s management buy-out financing.
- Peer-to-peer lending solution
- Suited to business purchases
- Secured or unsecured loans
- Loans from £25,000
- No hidden costs
- No early repayments fees
- Simple and fast application process
- Receive a decision in 24 hours
- Loans are provided by a community of lenders
- Suited to a wide range of businesses
rebuildingsociety.com is a peer-to-peer lending solution that offers loans to businesses by bringing together investors and borrowers together on one platform. They provide loans to businesses for a variety of reasons which include purchasing a business, cash flow, R&D and equipment purchase.
rebuildingsociety.com offers loans from its community of lenders to a variety of businesses that are small to medium-sized with loans from £25,000 on either a secured or unsecured basis. Their loans are transparent with no hidden fees or early repayment charges. They have a simple and fast application process that will give a decision in 24 hours.
10. Ultimate Finance
Some of the features and benefits of Ultimate Finance’s management buy-out financing.
- Can structure lending for a management buy-out
- Will combine different funding solutions
- Asset-based lending
- Construction finance
- Invoice finance
- Business loans
- A flexible and bespoke solution
- They offer a quick decision process
- Terms from 3 months to 5 years
- Claims to be competitively priced
Ultimate Finance is an alternative financial provider that offers a variety of business funding solutions to a wide range of businesses in the UK. They provide loan products that include their Ultimate Loan, asset-based lending, construction finance and invoice finance. They don’t offer a specific management buy-out loans but create a bespoke package to meet your needs.
Ultimate Finance will provide business funding solution for management buy-out that will be created from their range of products and they will combine them to structure the right loan for you. Their products generally offer loans up to £25 million on terms from 3 months to 5 years.
Some of the features and benefits of ThinCats’ management buy-out financing.
- Tailored business loans
- Suitable for business acquisitions
- Loans from £250,000 to £15 million
- Terms from 6 months to 5 years
- They require you to provide security
- Personalised loan service
- Assess loans beyond algorithms
- Timely and fast service
- Support provided by dedicated staff
- Available to a variety of UK based SME businesses
ThinCats is an alternative funding provider that funds business loans differently as they bring together institutional and retail investors to create bespoke loans solutions for businesses. They offer their loan products to small to medium-sized businesses in the UK which includes offering acquisition finance.
ThinCats’ acquisition finance is available for management buy-out and offers loans from £250,000 to £15 million on terms from 6 months to 5 years and requires security to be provided. They provide a personalised loan service that gives you access to one of their regional business development directors to support you to get a timely and fast loan.
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