ACQUISITION FINANCING
Acquisition financing for lower middle market transactions.
Aparti Capital advises business owners, investors, and management teams on structuring and securing capital for business acquisitions.
FINANCING A BUSINESS ACQUISITION
Financing an acquisition starts with the capital structure.
Acquisitions are rarely financed with a single source of capital. The appropriate structure depends on the purchase price, cash flow of the acquired business, available collateral, working capital requirements, buyer capitalization, seller participation, and the objectives of the transaction.
We evaluate these factors together to determine how much capital the business can reasonably support and how different sources of financing can work together.
01
Cash Flow
Sustainable operating performance and the cash available to service the proposed capital structure.
02
Collateral
Receivables, inventory, equipment, and other assets that may support financing capacity.
03
Working Capital
Liquidity required to operate the business following closing—not simply the capital required to purchase it.
04
Transaction Structure
Purchase price, seller financing, rollover, buyer capital, and other sources and uses affecting the financing requirement.
CAPITAL SOLUTIONS
Financing options shaped around the transaction.
We assess the role, cost, and limitations of each potential capital source—then structure them together around the needs of the acquisition.
Senior Debt
Cash-flow-based term financing for established businesses with demonstrated debt-service capacity.
Asset-Based Lending
Facilities supported by eligible receivables, inventory, equipment, or other business assets.
Equipment Financing
Asset-specific financing that may complement the broader acquisition capital structure.
Private & Junior Capital
Flexible capital for transactions requiring structures beyond conventional senior debt.
Seller Financing
Seller notes and deferred consideration structured alongside other capital sources, where appropriate.
Equity & Preferred Capital
Additional capital where debt alone would not create a prudent or executable structure.
OUR APPROACH
Institutional thinking. Practical execution.
We begin with the economics of the business, not simply the amount a buyer hopes to borrow. The capital structure must support both the acquisition and the company that follows.
Our advisory process combines disciplined underwriting, thoughtful structuring, and targeted engagement with suitable capital providers.
TRANSACTIONS WE ADVISE ON
Financing for a range of ownership objectives.
Every transaction brings different counterparties, risk considerations, and capital requirements.
Business Acquisitions
Financing for the purchase of established operating companies.
Independent Sponsor Transactions
Capital structures for sponsors pursuing acquisitions without a committed fund.
Management Buyouts
Financing for leadership teams acquiring a business they know and operate.
Add-On Acquisitions
Capital for strategic acquisitions by existing platforms and operating companies.
Ownership Transitions
Structures involving seller participation, deferred consideration, or partial ownership changes.
HOW WE WORK
From initial assessment through financing execution.
We organize the financing workstream to bring clarity to decisions, counterparties, and timing.
01
Assess
Review the business, acquisition objectives, purchase economics, and preliminary financing capacity.
02
Structure
Develop a supportable sources-and-uses plan and evaluate alternative financing structures.
03
Prepare
Organize the materials lenders and capital providers need to evaluate the opportunity.
04
Source & Negotiate
Engage suitable capital sources, assess proposals, and negotiate material terms.
05
Execute
Coordinate the financing workstream through diligence, documentation, and closing.
FREQUENTLY ASKED QUESTIONS
Questions about acquisition financing.
What is acquisition financing?
Acquisition financing is capital used to fund the purchase of a business. Depending on the transaction, it may include senior debt, asset-based lending, seller financing, private capital, and equity.
How much debt can a business support in an acquisition?
Debt capacity depends on sustainable cash flow, required debt service, existing obligations, collateral, working capital, and the lender’s underwriting standards. Purchase price alone does not determine borrowing capacity.
Can the acquired company’s assets support financing?
In some transactions, eligible receivables, inventory, and equipment can support asset-based or equipment facilities. Advance rates, eligibility, liens, and timing vary by capital provider.
Can seller financing be part of the capital structure?
Yes. Seller notes and deferred consideration may help bridge a financing gap, but their payment terms and priority must work alongside the senior capital structure and the business’s cash flow.
When should I begin arranging acquisition financing?
Ideally, financing feasibility is assessed before committing to a purchase price or exclusivity. Early review can identify capital constraints and help inform transaction terms before diligence and documentation accelerate.
PERSPECTIVES & INSIGHTS
Thinking beyond the transaction.
Research and perspectives on acquisition financing, capital structures, and the lower middle market.
ACQUISITION FINANCING
How to Finance a Business Acquisition
A practical guide to financing sources and the acquisition capital stack.
CAPITAL STRUCTURES
How Much Debt Can a Business Support?
Cash flow, collateral, and liquidity all influence borrowing capacity.
TRANSACTION PERSPECTIVES
Understanding the Acquisition Capital Stack
How senior debt, seller financing, junior capital, and equity fit together.
LET'S DISCUSS YOUR TRANSACTION
Planning an acquisition? Let's discuss the capital structure.
Tell us about your transaction and capital requirements. We will review whether an initial conversation may be appropriate.