Acquiring an SME is not just about negotiating the price and signing an agreement. Financing is often the cornerstone of the project. Between bank requirements, private solutions, and more flexible mechanisms, there is a wide range of tools.
Here are the main levers used by buyers — with their advantages, limits, and real-life examples.
Principle: Amortizing loan granted by a bank, usually over 5 to 7 years.
Conditions: 20–30% equity contribution, strong guarantees, solid business plan.
Advantages: Low cost (2–5%), strong leverage effect.
Limits: Difficult access for atypical profiles or smaller deals.
🔎 Example: A buyer contributes €600k for a €2M target. The bank finances €1.4M, allowing the deal to close without external investors.
Principle: Loan provided by private debt funds, family offices, or investors.
Conditions: Credible project, experienced sponsor, fewer guarantees than banks.
Advantages: Speed, flexibility.
Limits: Higher cost (5–10%), reinforced reporting obligations.
🔎 Example: A fast-growing tech SME, considered too risky by banks, raises €3M from a private debt fund to secure its acquisition.
Principle: Hybrid financing between debt and quasi-equity.
Mechanism: Bullet repayment, high rate (8–12%), sometimes with an “equity kicker.”
Advantages: Increases borrowing capacity without immediate dilution.
Limits: Expensive, higher risk.
🔎 Example: In a €20M LBO, a €3M mezzanine tranche completes bank debt to reach the target financing.
Principle: Single loan combining senior and mezzanine, offered by specialized funds.
Conditions: Deals > €10M, targets with recurring cash flows.
Advantages: Speed, contractual simplicity.
Limits: Intermediate cost (6–9%), not suitable for small operations.
🔎 Example: A fund supports a €15M industrial acquisition with unitranche, avoiding multiple negotiations with different banks.
Principle: The seller accepts deferred payment over 1 to 3 years.
Advantages: Facilitates negotiation, reassures banks.
Limits: Limited amount (10–30% of the price), depends on seller–buyer trust.
🔎 Example: A seller agrees to a €500k vendor loan, enabling the buyer to finalize bank financing.
Principle: Part of the price depends on future performance (revenue, EBITDA).
Advantages: Reduces buyer risk, keeps seller engaged.
Limits: Complex negotiation, risk of disputes.
🔎 Example: A €1M earn-out is tied to the signing of 3 key contracts within 24 months post-acquisition.
In addition to traditional instruments, Bpifrance offers specific tools to support SME acquisitions:
These public tools act as accelerators and enhance credibility with financial partners, especially for first-time buyers or leveraged structures.
A successful acquisition often combines several instruments: bank debt + vendor loan, or private debt + earn-out, depending on deal size and buyer profile.
The key lies in a solid business plan, the buyer’s credibility, and smart structuring.
👉 At Re-New, we help buyers consolidate and structure their financing thanks to our ecosystem of banking partners, private investors, and experts.
