£137.5K to fund an accountancy practice acquisition.

The firm required funding to support the acquisition of another accountancy business.

This wasn’t money being borrowed speculatively for general growth. There was a real transaction behind it, supported by agreed Heads of Terms.

Practice acquisitions need to be understood differently from ordinary capital expenditure. A significant part of the value being acquired may sit in the client bank, recurring fees, goodwill and the future earnings of the practice rather than machinery or traditional physical assets.

The funding therefore had to be considered around the commercial logic of the acquisition and the ability of the enlarged practice to service the borrowing.

We presented the acquisition as the transaction it actually was rather than simply submitting a generic business-loan application.

The Heads of Terms and acquisition rationale were provided to support underwriting and the case was worked through to completion. A facility of £137,500 was arranged.

The accountancy practice could proceed with the acquisition without having to fund the entire purchase from existing cash reserves.

It gave the business the ability to acquire additional recurring fee income while retaining capital inside the practice for ongoing operations.