Beyond Banks: Innovative Acquisition Financing Sources for Modern Businesses

Modern businesses crave innovative acquisition financing that can help fund ambitious growth plans.  The demand for this type of acquisition financing is always present but not always fulfilled due to the state of the acquisition financing market. While there are thousands of capital providers, many of them like banks use traditional screening and underwriting approaches that fail unlock value for the borrower.

Fortunately, across each distinct vertical of acquisition financing – SBIC, BDC, Private Debt Funds, Mezzanine Funds – there are plenty of high performing funds that qualify as innovative that are great to work with. Some innovative acquisition financing sources offer unparalleled loan sizes that give a borrower all the financing needed to close a big deal. Others compete based on speed and can get a deal done quickly to satisfy a tight timeframe. Yet others offer the ability to flexibly grow their loan size to accommodate the continuous growth of the borrower. The innovation quotient of each acquisition financing provider is a function of their respective talent pool and the formative experiences of their senior leadership. In our experience over the past 35 years on $2 billion acquisition financings, the best talent is comprised of business savvy pragmatic people who have experience on the inside of a real company that makes something.

Innovative acquisition financing sources can quickly grasp what you are doing and translate their lending structure in a way that adds value to your acquisition strategy. They can conceptualize the most important need you have in your acquisition financing ask and conform their loan to fit that specific need. This often leads to unlocking unprecedented levels of capital availability to drive the acquisition financing strategy. It eliminates capital barriers to growth and cultivates high level M&A discipline for the borrower. The emerging force in the acquisition financing markets are spin-off funds from large funds who can make quick decisions and run fast processes. Truly innovative acquisition financing sources can combine high level thinking with fast moving delivery processes in a way that does not overwhelm the borrower’s internal resources. Funds that offer highly bespoke structures in a highly efficient manner bring the most value to a borrower.