Business acquisition finance · Business expansion finance
Business acquisition finance for Business expansion finance
Expansion finance is funding used to grow a business — a second location, additional equipment, more staff or an acquisition — structured so the repayment is carried by the capacity being added rather than by existing trade.
How a business acquisition finance works for Business expansion finance
Buying an existing business skips the ramp-up entirely: you acquire trading revenue, customers and staff on day one. That is why lenders are often more comfortable with acquisition than with greenfield expansion. Assessment focuses on the target’s financials, customer concentration, how much of the value walks out with the vendor, and the transition arrangements. Vendor finance for part of the price is common and useful, because it keeps the seller invested in a successful handover.
The cash-flow pattern we plan around
Costs incurred immediately on new capacity while revenue from it builds over six to twelve months, with existing trade carrying the repayment in the meantime.
What business expansion finance typically fund
- Opening or fitting out a second location
- Additional equipment or fleet to take on more work
- Hiring and training ahead of contracted revenue
- Acquiring a competitor or complementary business
- Buying premises rather than continuing to rent
Business acquisition finance for Business expansion finance: the numbers
| Typical amounts | $100,000 – $10,000,000 |
|---|---|
| Term | 24–120 months |
| Indicative rates | 7.5% – 16% p.a. |
| Repayments | Monthly |
| Speed | 3–8 weeks |
| Documents business expansion finance usually need | ABN and two years of financials · A written plan or projection for the expansion · Quotes, lease or contract of sale for what is being funded |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
Key terms
Business expansion finance
Business expansion finance is lending used to add capacity — sites, equipment, staff or acquisitions — structured with terms and repayment timing that account for the delay before new capacity generates revenue.
Ramp-up period
The ramp-up period is the time between new capacity becoming operational and it generating enough revenue to cover its own costs, during which existing trade must carry the finance repayment.
What is business acquisition finance?
Business acquisition finance is a loan used to fund the purchase of an existing business or a shareholding in one. Lenders assess the target business’s adjusted earnings, the assets included in the sale, the buyer’s deposit and any security offered.
How much deposit do you need to buy a business?
Most lenders expect the buyer to contribute 30–50% of the purchase price in cash or equity. Where the buyer offers property security, the required cash contribution can fall substantially.
What is vendor finance in a business sale?
Vendor finance is where the seller leaves part of the purchase price outstanding, repaid by the buyer over an agreed period. It bridges the gap between the price and what a lender will fund, and signals the vendor’s confidence in the business.
What is normalised EBITDA?
Normalised EBITDA is a business’s earnings before interest, tax, depreciation and amortisation, adjusted to remove owner-specific items such as above-market director wages, personal expenses and one-off costs. Lenders use it to estimate what the business will actually earn under new ownership.