The cheapest method of financing an acquisition bid is debt and it can take many forms. The amount of debt that is available to finance an acquisition changes depending on the projected cash flow of the combined company. The financial health of both companies is taken into consideration.
Equity carries the most risk because it has no claim to any assets. It is a more expensive form of capital than debt. This type of financing requires a borrower to relinquish some ownership in the combined company.
If a borrower already owns stock in the target company, it is possible to use that stock to purchase all or some shares for the acquisition. This is a common practice among publicly traded companies. A stock swap in private transactions is more difficult because the acquiring stock cannot be quickly sold.
Here at GCP Fund, we provide a range of commercial financing solutions for business acquisition needs.
These commercial financing services can help investors overcome common obstacles when acquiring a new property. We understand the importance of addressing these issues up front and that’s why, we offer expedited processes that help you source funds quickly and reliably.
Working with us will provide you the resources you need to execute your new deal with confidence.
If you are seeking to acquire another business, contact a senior broker at GCP first to discuss all of your options.