M&A Financing

Businesses use various financial instruments to fund their mergers and acquisition activities. Some companies have enough cash on hand to fund a merger or acquisition without outside financing, but in situations where it is necessary, there are two primary options:

• Equity financing: With equity financing, businesses issue new shares or sell company stock to raise capital for a merger or acquisition. Companies may also do a “stock swap,” where the target company’s shareholders receive some shares of the acquiring company in exchange for their ownership.
• Debt financing: Businesses can also get loans from banks, the Small Business Administration (SBA) or alternative lenders like Porter Capital to get the necessary cash for merging with or acquiring another company.

Sometimes, companies will use a combination of these two methods to finance an acquisition or merger. There are pros and cons to each — with a typical bank loan, you get the cash needed for the acquisition, but you’ll need a steady stream of income and a steady or growing EBITDA (earnings before interest, taxes, depreciation, and amortization). You’ll also have to deal with interest rates when you pay back the loan. With equity financing, you will not take on any debt, but you will lose some ownership of your company.

If you want financing without losing equity or waiting for a bank loan, you can receive financing from an alternative lender like Porter Capital.

Mergers and acquisitions are common among businesses looking to grow or maintain a competitive advantage. Seeking nontraditional financing allows companies to get the necessary capital quickly and smoothly.

Porter Capital leverages short-term assets as a down payment for business acquisition financing. Once you’ve identified your target business, we recommend you consult an alternative lender before issuing a letter of intent to the target business. This way, you’ll know how many of your short-term assets can be used before the deal is structured. From there, you can approach the target business for negotiations and reach preliminary terms with the seller.

Selling a business or merging with another company can be an emotional decision. You’ll want to enter the negotiation process with an understanding of what you will and will not compromise on — with this strategy, you’ll avoid accepting a deal with unreasonable terms.

After reaching the preliminary deal, you can approach your lender again to receive the appropriate loan.

Businesses in any industry can get acquisition financing to move the M&A process forward. Whatever industry you’re in, Porter Capital can help you procure M&A financing.

• Staffing and Payroll
• Manufacturing
• Distribution
• Service Companies
• Oil and Gas
• Transportation
• Government Contracts
• Technology

Whether you’re a startup looking to merge with another small business or a mature company looking into a multimillion-dollar acquisition, Porter Capital can help you get a loan quickly so you don’t need to sacrifice ownership or be subjected to a bank’s timeline.

When you seek M&A financing, your company can receive the funds necessary to acquire another business quickly. Instead of spending time raising and setting aside capital from normal business operations and potentially losing the acquisition opportunity, you can complete the transaction smoothly.

When you work with an alternative lender to finance a merger or acquisition, you can:

Porter Capital has offered commercial financial services nationwide for more than 30 years, and we’ve provided businesses across the United States with billions of dollars in working capital solutions. Porter Capital leverages short-term assets like the following as a down payment for acquisitions:

• Accounts receivables
• Company property
• Intellectual property
• Inventory

Working with an alternative lender like Porter Capital helps you avoid some of the pitfalls of traditional funding. For example, there are stringent prerequisites associated with getting a bank loan. If you do not meet every requirement, your acquisition could be put on pause, leading to frustration or even a seller backing out of the deal. You can also avoid diluting your ownership by giving away equity in exchange for ownership. With an asset-backed loan from Porter Capital, you can potentially receive funding in as little as 24 hours.

Mergers and acquisitions can provide access to industry-leading talent and increase profits while lowering costs. If you do not have the cash on hand for an acquisition, there are many ways to procure acquisition funding, including from an alternative lender like Porter Capital.

We’re committed to your business’s success, and our application process is simple. When you apply, we’ll ask you a bit about your business, and we’ll review your application and company financials to get you your financing in as little as 24 hours.

Apply for M&A financing from Porter Capital today, or contact us online for more information.