Acquisition finance is a term referring to the different sources of capital used to fund mergers and acquisitions. Usually complex in structure, acquisition finance requires a tailored approach and the acquisition itself requires thorough planning – often more so than other business purchases. The financing of an acquisition can come from multiple sources, with one of the key challenges finding the appropriate mix of financing that offers the lowest cost. Companies can grow in a variety of ways, including by increasing their workforce, launching new services and products, reaching new customers and expanding their marketing. However, synergistic acquisitions are a
A business loan is any kind of loan offered to a commercial entity as opposed to an individual. Business loans typically range from as little as £1,000 to in excess of several million. Repayment terms will vary from one month to fifteen years, depending on the lender and the type of loan. Business loan rates will vary depending on a multitude of factors, from the length and size of your loan, right through to your business’s financial position. There are a variety of different commercial loans currently available to UK businesses and selecting which one is right for your needs
Corporate venture capital – or CVC for short – is a subset of venture capital. CVC usually comes from large corporations seeking to invest in smaller businesses which are both relevant and beneficial to the parent group. The corporation will offer funding in exchange for a share in the business, as well as offering their expertise, network and contacts. Businesses looking for corporate venture capital funding need to prove that they can help the larger corporation via market reach, insights or innovative technology. Corporations will already be aware of successful, disruptive businesses, so these are usually the primary targets for
Expansion capital is the money needed to expand the business. It refers to the capital or expense undertaken to expand the business to generate increased profit. Expansion capital includes funding for expansion into new markets, expansion overseas, new premises and more.   It can enable your business to: Expand its product or service proposition Enter new markets Target new geographies Acquire other businesses The aim is to help your business grow as much as possible. A lender offering expansion capital will invest a sum of money into your business with the money paid back over an agreed period. This form
Growth loans are a form of financing specifically directed toward the growth of a company. They are a necessity when it comes to taking advantage of opportunities that require a business to scale up production, make a large advance order, or otherwise invest significantly in their growth. As a company grows, so too does its need for growth financing. A significant investment is often necessary to improve the business, increase sales and expand market penetration. Businesses may need financial resources to obtain inventory, get new equipment, fulfil a large order, or to improve/expand their services. Growth financing is designed to
Private debt refers to loans given to companies by private investors or markets, rather than banks or public markets. Since the 2008 financial crisis, banks have reduced their lending activity – particularly to SMEs – and the demand for private debt has grown. Private debt is an attractive alternative to traditional lending, as it can be structured to suit the needs of the borrower. Investing in private debt offers the opportunity to target yield, through interest payments and potentially an uplift in the capital value of the company borrowing the money (depending on the structure of the deal). As debt
Recurring revenue is the portion of a company’s revenue which is expected to continue, on a repetitive basis, in the future. These revenues are predictable – unlike one-off sales – as well as being stable. Recurring revenue can be counted on to occur at regular intervals going forward, with a relatively high degree of certainty. Having recurring revenues helps a company or organisation in many ways.   Benefits of recurring revenue   Predictable revenue In a traditional business model based on one-time sales, revenue is prone to market-based fluctuations. The recurring revenue model will guarantee a business a certain amount
Sometimes referred to as annual run rate or annual revenue run rate, a revenue run rate is a forecasting method enabling you to make predictions surrounding the financial performance of your SaaS company over the coming year, based on past earnings data. Completing a revenue run rate calculation is relatively straightforward, assuming that you have access to several months’ worth of revenue data. Take your revenue over a specific period – usually a month – and multiply it by 12 to find the annual revenue run rate.   What are revenue run rates used for? Revenue run rates can be
Software as a Service (or SaaS) is a way of delivering applications over the internet, as a service. Instead of needing to install and maintain software, you can access it via the internet to free yourself from the management of complex soft and hardware. SaaS applications are sometimes referred to as web-based software, on-demand software or hosted software. SaaS applications often run on the provider’s services, with the provider themselves managing access to the application including availability, performance and security.   Benefits of SaaS Accessibility: Any SaaS application will run through a browser, meaning you won’t be restricted by any
The Technology, Media and Telecom sector (or TMT for short) is an industry grouping which comprises the vast majority of companies focusing on new technologies. The TMT sector is sometimes referred to as Technology, Media and Communications (TMC) and there is a substantial overlap between TMT and the 1990s idea of the New Economy. The technology sector can not hold every firm that depends on innovation because the role of technology has expanded extensively. For example, both Netflix and Meta are in the Communication Services Select Sector spur fund rather than the technology sector. Big tech companies increasingly dominate the
A type of debt financing obtained by earlier stage companies and startups, venture debt is typically used as a complementary method to equity venture financing. This form of debt financing can be provided both by banks specialising in venture lending and non-bank lenders. Venture debt is a viable alternative to equity venture financing. A primary benefit, similar to other methods of debt financing, is preventing the further dilution of the equity stake of a company’s existing investors, including employees. It works differently to conventional loans, with the principal amount of debt usually determined using the amount raised in the last