Management buy-in (MBI) financing

We can help management teams secure more than £2 million to finance a MBI. We focus on articulating your buy-in plan to generate funder interest and confidence. Our expertise spans debt financing, equity financing and everything in between. We present your MBI plan to the right funders, in the right way and negotiate the best terms for the management group. This gives the best chance of making the transition to company ownership happen.

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TRUSTED BY businesses across the UK

WHAT IS BUSINESS FINANCING?

Business financing is sought for the specific purpose of funding business activities which can include acquiring another business, management buy-ins (MBIs) or buyouts (MBOs), a key growth project or investing in new talent. Business financing can help you achieve your growth objectives and strengthen your overall competitive advantage. But the process to secure the business funding you need can be time consuming, stressful and costly if you don’t know what you’re doing.

HOW MUCH BUSINESS FUNDING CAN YOU SECURE?

We work with ambitious, high-growing businesses that have funding needs in excess of £2m and regularly approaching £100m. Our clients’ needs will typically be for sophisticated finance products such as cash flow based lending or private equity investments. Our value lies in helping clients access funding that relies on confidence in future trading and cash flows.

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BUSINESS FINANCING – COMMON PITFALLS TO AVOID

We can confidently say that every client we engage is unprepared to take their funding proposal to their business bank or alternative lender. Being unprepared for funder scrutiny can significantly reduce, or entirely remove, your chances of getting the financing your business needs. Remember: first impressions count.

The typical things that can erode funder confidence and jeopardise your chances of securing a business loan include:

  • Failure to fully explain your business model;
  • Poor articulation of your value proposition and value drivers;
  • Inconsistent, incoherent or incomplete financial information;
  • Weak financial modelling and incomplete forecasts;
  • Presenting a biased view of business performance and risks;
  • Funding proposals that exclude critical information that lenders expect to see.

BUSINESS FINANCING – HOW TO DO IT RIGHT

To successfully secure business funding, whether it’s for supporting an acquisition, a management buyout (MBO) or organic growth, you need to achieve four fundamental objectives:

  1. Create a robust business plan that stands up to funder scrutiny;
  2. Articulate that plan in a balanced and coherent way that funders can understand;
  3. Approach the right partners to fund your plan as part of a competitive process;
  4. Defend value in due diligence and close your transaction professionally.

Funders need to have confidence in you and your business from the beginning to the end of the financing process. In the world of funding first impressions matter and you must never approach the funding market until you are truly ready. We can help you get ‘market-ready’ to deliver funder confidence and secure the funding you need to make your ambitions happen.

BUSINESS FINANCING ADVISORY SERVICES

By using our business funding advisory services, our experts will ensure that your funding proposal stands up to funder scrutiny and gives you the best chance of securing the funding you need. Below are the different types of business financing we can help you secure:

WHAT IS MBI FINANCING?

MBI finance is often needed when an external management team purchases a controlling ownership stake in a target company and replaces its existing business leaders. The new leadership team running the business can help strengthen its competitive advantage.

But the process to secure MBI finance can be time consuming, stressful and costly if you don’t know what you’re doing. That's why it's important to work with a MBI funding specialist.

Learn more by visiting this page at Investopedia.

WHO DO WE WORK WITH?

Our funding specialists work with ambitious management teams that require in excess of £2m to finance a management buy-in. Our clients’ needs will typically be for sophisticated MBI financing products such as cashflow-based lending or private equity investments. Our value lies in helping clients access funding that relies on funder confidence in future trading opportunities and cashflows.

See our deals and success stories.

MBI FINANCING – COMMON PITFALLS TO AVOID

We can confidently say that every management team we engage with is under-prepared in terms of taking their MBI proposal to funders. If you're not ready for scrutiny from potential funders, you probably won't get the money you need to take over a business. Remember: first impressions count.

Typical things that can erode funder confidence and jeopardise your chances of securing MBI finance include:

  • Failure to explain your business model or growth strategy;
  • Poor articulation of the value proposition and value drivers of the target business;
  • Overlooking hidden risks that may come with the target business;
  • Misalignment between the management team taking over the business;
  • Inconsistent, incoherent or incomplete financial information;
  • Weak financial modelling and incomplete forecasts;
  • Presenting a biased view of existing business performance and risks;
  • Financing proposals that exclude the critical information that lenders expect to see.

THE RIGHT WAY TO SECURE MBI FINANCE

To successfully secure MBI finance, a management team needs to achieve six fundamental objectives:

  1. Create a robust business plan that stands up to funder scrutiny.
  2. Articulate that plan in a balanced and coherent way that funders can understand.
  3. Ensure all members of the business takeover team are fully aligned.
  4. Demonstrate deep knowledge of the acquisition target and its cash flows.
  5. Approach the right partners to fund your MBI plan as part of a competitive process.
  6. Defend value in due diligence and close your transaction professionally.

Funders need to have confidence in the management team and the MBI plan from the beginning to the end of the process. First impressions matter and you must never approach th

MBI FINANCING ADVISORY SERVICE

Our advisory service helps you secure MBI finance. We do this by optimising your financing proposal to build funder confidence. This gives you, and the management team, the best chance of securing the necessary funding to make the transition to company ownership happen. This is what our advisory service provides:

EVALAUTE MANAGEMENT TEAM READINESS

We add further value by making a site visit to assess how ready, and aligned, the management team is to take over the business. We'll assess the level of capital available to support the transaction and advise you on the overall viability to finance your management buy-in.

CREATING THE RIGHT INVESTMENT PITCH

If your management buy-in is fundable, we will deliver funder confidence by drafting a proposal that presents your target business in its best light, and in a balanced and professional way. It will answer critical funding questions and leave a positive lasting impression of the business you wish to acquire.

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KEEPING YOU INFORMED

We deliver confidence by keeping you informed at every stage of the MBI funding process. We provide transparency by advising what impact each funding package will have on your business. Our process allows you to make an informed business decision on what MBI funding solution to go for.

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MANAGING FUNDER DUE DILIGENCE

We add further confidence and value by managing the funder’s due diligence process on your business. We will save you significant time by helping you answer the funder’s questions in the way that they require.

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Additional benefits of using shaw & co

MARKET INDEPENDENCE

We’re 100% independent of any funder. Unlike brokers, we are not tied to certain funders or products. Neither do we accept commissions which create conflicts of interest. We leverage our independence to get you the best deal. Let us deliver confidence.

RIGHT FIRST TIME

We save you considerable distraction advising you on exactly what funders need and how their requirements change. Don’t risk a funding rejection by guessing how to create a funding proposal. Let us show you the way.

SAVING TIME & STRESS

We work with the funding market on a daily basis. We save you considerable time knowing who to approach and what they need to see as well as knowing current market rates and practices. Let us add exceptional value.

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FAQS

Do you accept non-UK clients?

No - We work exclusively with UK-based SMEs and small cap PLCs. However, our clients often have international activities and we regularly transact with overseas buyers and investors or arrange overseas acquisitions on behalf of our UK clients.

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What type of funding can you help me access?

We pride ourselves on understanding the requirements of, and having access to, funders in both the debt and private equity markets for funding in the range of £5m to £100m. Our team actively maps the ever-evolving funding market to give you confidence that all suitable options are being considered on your behalf. Our aim is to provide you an ‘all of market’ appraisal of your options.

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Should I use debt funding or equity funding?

That very much depends on your funding proposal. A huge benefit of working with Shaw & Co is that we do not have any bias towards a given lender, investor or type of funding, and we have the breath of expertise to advise across both debt and equity products. Both debt and equity have pros and cons, so our team can talk you through each so that you can make an informed decision and find the right solution.

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Wouldn’t funders prefer that businesses approach them directly?

No. Funders appreciate a robust proposal and opportunity that has been thoroughly prepared and which they can engage with. They get frustrated by poorly prepared approaches and having to waste precious time coaching businesses on the information they need. Although funders will know that they are in a competitive process when receiving a proposal from Shaw & Co, they would much prefer this approach rather than dealing with ill prepared applications and patchy information. We give funders confidence that the information they are assessing is saving them both time and money - and by doing some of their work for them, we are able to negotiate lower arrangement fees.

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Do I have any say on which funders Shaw & Co approach to secure business funding?

Yes, of course. We work with you to agree which funders we will approach and discuss with you why we think that they will be good for your business. You ultimately decide the preferred funder to work with (or any to avoid!).

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When Shaw & Co is involved, will I lose control over the process?

Certainly not! When arranging your business funding, we are careful to agree how the process will be run, what the timescales are, which funders we will approach, and what outcome we are looking to achieve. From then on, we will we keep you informed every step of the way.

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How do you get paid?

We are remunerated only by our clients (not the funders). Our fees are predominantly 'Success Fees’, meaning that we get paid on completion of the deal. We take great care to make sure our fees are aligned with your goals, and we take pride in our fees always being a proportion of the value we add. We do also ask for a 'Commitment Fee' on all transactions which is calculated as a modest percentage of the expected ‘Success Fee’. Everything we may receive on a transaction is completely transparent to our clients.

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Does Shaw & Co accept arrangement fees from funders?

No, because we think that it is wrong. Some funders, particularly debt lenders, typically pay a referral fee to third parties for introducing a borrower and the client has no control over these arrangements. We believe this creates a conflict of interest and puts any client at a disadvantage, because any third party whose business is based on receiving a referral fee will be incentivised to ‘recommend’ the offers that earn them the biggest fees, rather than that which is best for the client. Furthermore, nothing is ever free. A referral fee paid by a lender to an introducer still comes out of the borrower’s pocket because the lender adds the referral fee onto the lending fee it charges for agreeing the facility. The lender and the introducer are in fact working against the client. If we are offered a referral fee, we either ask the lender to net it off the arrangement fees, or we pay that fee straight through to our client to make sure the client benefits, not us.

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Is Shaw & Co an expensive luxury when it comes to raising finance?

Absolutely not! Here is a reminder of what we do for you: We optimise your proposal, your financial model and articulate your USPs. Very few, if any, businesses are ready to, or know how to, approach a provider of finance. We approach the right funders in the right way on your behalf. By offering a professional, well thought through, easy to engage with proposal to funders, we create interest and run a competitive process which reduces funding costs. We can help to negotiate the entire package on your behalf, not just the price. There is so much more to an offer than the headlines. All this results in three benefits for you 1) a higher chance of securing the funding you need; 2) We can save you money by driving down funding costs, and 3) peace of mind that you have secured the right funding for your business.

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Are you sector specialists?

We have specific sector knowledge derived from many years of collective deal making experience. However, we pride ourselves on the diversity of sectors we work with which challenges us to think creatively. This creative and challenging approach brings huge value to our clients when helping them to build robust business cases.

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What sort of service experience can I expect if I instruct Shaw & Co?

We take all of our clients through a carefully crafted journey. Firstly, to ensure that we are a great match for each other and once engaged, to ensure we deliver exceptional client service that exceeds expectations.

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LEARN MORE ABOUT SHAW & CO

Why Shaw & Co

WE MAKE DEALS HAPPEN

Our highly talented people are creative, innovative and thrive when faced with a deal-making challenge. It's no surprise that we make deals happen and turn your ambition into a greater outcome.

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Fees & charges

COMPLETELY TRANSPARENT & ALIGNed With your GOALs

Our objective is to ensure that our fee more than pays for itself from the value we create for you and your business.

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