Funding types
The funding types, and what each one is actually for
Every page below describes a product that a lender provides and a broker arranges. Reads makes the introduction to the people who do that. We are explaining the landscape here, not offering you anything from it.
Start here
Most funding questions are really one of six questions
Buying something. Paying for something you already own. Bridging a gap between money going out and money coming in. Putting a building on the balance sheet. Replacing an expensive facility with a cheaper one. Or funding growth that has not happened yet.
You do not need to arrive knowing which category you are in, or what the product is called. Say what you are trying to do and the right person will name it.
One thing worth knowing before you read further: most acquisitions are not funded by a single facility. A term loan for the goodwill, asset finance for the vehicles and an invoice line for the working capital is a completely normal structure, and it is usually cheaper than asking one lender for one large facility. Read stacking facilities for how those fit together and what breaks when the ranking is wrong.
The list
Every funding type
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Article
Asset finance, and the equipment already sitting in the business you are buying
Funding tied to a specific asset. The three forms, what makes an asset fundable, and the agreements in the target that have to be found before...
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Guide
Asset-based lending, and how a borrowing base is built
A facility sized on what the balance sheet holds rather than on a multiple of profit. How the borrowing base...
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Article
Bridging finance, and why the exit is the whole product
Short-dated money to hold a position while something else completes. What it costs in structure, and why a...
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Guide
Commercial mortgages, and what happens when the target owns its premises
Long-term lending on a building, and the questions it forces about the deal around it. Valuation, tenure, VAT...
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Article
Equity and private equity, and the exit you are agreeing to
Money for a shareholding rather than a loan. What an investor is really buying, what you give up alongside...
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Guide
Government-backed lending, and what the guarantee does not do
The guarantee protects the lender, not the borrower. What that changes about a decision, and the eligibility...
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Article
Invoice finance, and the facility the target already has
Money advanced against invoices already raised. What counts as an eligible invoice, how the two charges work...
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Article
Mezzanine finance, and the cost that only appears at the exit
Funding that sits between senior debt and equity. Why it is priced the way it is, what the intercreditor deed...
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Article
Refinance, and the year after the acquisition when the terms stop fitting
Replacing facilities that were priced for a risk that has since gone. The triggers worth acting on, and the...
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Guide
Senior term debt, and what an acquisition lender is really lending against
The main loan in most acquisitions. What secures it, how it is priced and repaid, and the profit rebuild that...
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Article
Vendor and seller finance, and whether your lender counts it as equity
Part of the price left in by the seller. The three forms, and the drafting question that decides how much you...
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Article
Working capital, and the month three problem after an acquisition
The most under-funded part of a business purchase. What covers the gap, what each facility costs, and the...
The part that decides the answer
The product matters less than who is looking at it
It is tempting to treat this as a shopping list: work out which product you need, then go and get it. In practice the same business asking for the same facility gets very different answers from different lenders, because the difference is whether they understand what they are lending against.
We know this market and we know specific people who have funded businesses like the one you are buying, so the same proposal goes in front of someone who reads it correctly rather than someone learning your sector at your expense. That is the whole reason we exist, and why Reads sets out the argument honestly, including the cases where you should go straight to your own bank instead. If you want to know what a lender is going to ask before you speak to one, start with what lenders look for and the document checklist.
You do not need to know which one you need
Tell us what you are trying to do and what sector it is in. Working out which facility fits is the lender's job, and knowing which lender to ask is ours.