Definition of Acquisition financing:
The type of funding obtained by a business for the purpose of purchasing another business. These funds allow the purchaser to provide the seller the needed funds immediately for the purchase. It is common for the debt to be repaid with shares or minority interest in the company being acquired.
There are several different choices for a company that is looking for acquisition financing. The most common choices are a line of credit or a traditional loan. Favorable rates for acquisition financing can help smaller companies reach economies of scale, which is generally viewed as an effective method for increasing the size of the company's operations.
Acquisition financing is the capital that is obtained for the purpose of buying another business. Acquisition financing allows users to meet their current acquisition aspirations by providing immediate resources that can be applied to the transaction.
How to use Acquisition financing in a sentence?
- Acquisition financing is the funding a company uses specifically for the purpose of acquiring another company.
- Other types of acquisition financing including Small Business Association (SBA) loans, debt security, and owner financing.
- Bank loans, lines of credit, and loans from private lenders are all common choices for acquisition financing.
- By acquiring another company, a smaller company can increase the size of its operations and benefit from the economies of scale achieved through the purchase.
Meaning of Acquisition financing & Acquisition financing Definition