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Common Misconceptions About Buying a Business
Although M&A transactions can be complex, the barrier to entry has never been better. With the rise in banks lending and a wave of retiring sellers, clever deal structures have opened the door for more buyers.
I’m not a credible buyer unless I’m already wealthy or own a big company?
Isn’t the process way too complex for someone who’s never done it before?
How a deal using debt can work, simplified with a £1 million example:
Do you need 100% of the money upfront to purchase a business?
Not true. Being a credible buyer isn’t about having deep pockets – it’s about having the right ingredients: • A proven track record or business experience • “Skin in the game” – that might be some capital or the ability to leverage finance • A clear reason for the acquisition, backed by a sound business plan • And crucially, the numbers in the target business need to work – the cash flow should comfortably cover the debt repayments You’re not personally taking on the debt, the company you acquire is, and it’s repaid from its own profits. That’s exactly how most acquisitions are structured, even by experienced dealmakers.
It can feel overwhelming at first – especially if you’ve never bought a company before. But you don’t need to figure it all out alone. With the right team around you, people who’ve actually bought, scaled, and exited businesses, the process becomes much simpler. We guide you through everything from finding opportunities and valuing businesses to negotiating and closing deals. You stay in control of decisions. We handle the complexity and guide you to completion. Whether you’re a first-time buyer or looking to grow through acquisition, the process can be made clear, structured, and successful.
No, this is a common misconception. The majority of business acquisitions are not structured as 100% cash deals. Instead, they often involve a blend of debt financing, deferred payments, and equity. Think of it like buying a house, if every buyer had to pay the full price in cash on day one, very few houses would be sold. The same logic applies to mergers and acquisitions. Even high-profile deals, like Elon Musk’s purchase of Twitter in 2022, involved debt. Just as with property purchases, in M&A you can put down a portion of the total price and structure the rest through other financial mechanisms.
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Your Equity: £100k
Bank Debt: £700k
Deferred Consideration: £200k
Deal Closed at £1 Million
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Acquisition finance term 3 - 5 years
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