Funding business acquisitions

Whether you're buying your first business, taking over one you already manage or expanding through acquisition, AcquisitionLine provides finance to help you purchase an established New Zealand business.

We look at the business you're buying, its financial performance, your experience and how the purchase is being structured. Because every acquisition is different, we consider the whole transaction when assessing the funding.

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AcquisitionLine

Funding for business acquisitions

Up to $500,000*
Funding
6–60 months*
loan terms
Up to 85%*
OF THE PURCHASE PRICE
Tailored assessment
Based on the acquisition

Different businesses. Different reasons to buy.

Some business purchases are about taking the next step in your career. Others are about bringing two businesses together, securing an established customer base or planning for a change in ownership.

AcquisitionLine supports a range of transactions involving established trading businesses.

Purchasing an established business

Take ownership of an existing business with a trading history, customers, systems and operations already in place.

Expanding through acquisition

Purchase another business to enter a new market, extend your services, increase capacity or bring complementary operations together.

Management & employee buy-outs

Move from working in a business to owning it, whether you're part of the management team or an employee looking to take over an established operation.

Business succession

Support a change in ownership when an existing owner is retiring, stepping away or transferring the business to the next generation.

Is AcquisitionLine right for your plans?

AcquisitionLine is designed for individuals and businesses purchasing established New Zealand businesses with a demonstrated trading history.

AcquisitionLine could be a good fit if:

✓
You're purchasing an existing business rather than starting one from scratch
✓
The business you're buying has traded for at least three years
✓
The business being acquired has annual turnover of $200,000 or more
✓
The business can demonstrate sufficient earnings and cashflow to support the proposed lending
✓
You have relevant business or industry experience, or access to suitable management expertise
✓
You can demonstrate how the acquisition will be funded, including your own contribution or other agreed funding arrangements

Not sure how your acquisition fits?

Business purchases can involve different ownership structures, funding contributions and security arrangements. If you're working through a potential acquisition, we're happy to discuss what you're planning and the information we'd need to consider it.

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AcquisitionLine at a glance

Up to $500,000*
funding amount
6–60 months*
loan term
Generally up to 70–85% of the purchase price
Funding contribution
Minimum three years for the business being acquired
Business trading history
Minimum $200,000 annually for the business being acquired
Business turnover
Structured according to the approved facility and loan agreement
Repayments
Personal guarantees and business security; property security may be required in some circumstances
security
More than a transaction

Different acquisitions call for different funding structures

Buying a business isn't always a straightforward transaction between one buyer and one seller.

You might be purchasing through a newly formed company, expanding an existing business through acquisition or arranging for the seller to finance part of the purchase price.

Your own financial contribution, the security available and the way the purchase is structured can all influence how the acquisition is funded.

AcquisitionLine accommodates different purchasing arrangements, with lending considered in the context of the transaction and the people involved.

And while property security may be part of some arrangements, owning property isn't a requirement for every AcquisitionLine borrower.

It's about finding a funding structure that makes sense for the purchase, while ensuring the proposed repayments are supported by the business's financial performance.

Our approach

Looking at the whole acquisition

A business's financial statements tell us a great deal, but they're only part of the picture when ownership is changing.

We also consider what the purchaser is bringing to the business, how the operation may change after settlement and whether its earnings can support the proposed lending.

That wider perspective helps us assess acquisitions on their commercial merits.

The business you're buying

We review its trading history, profitability and cashflow, including any material changes in recent performance.

The people taking it forward

We consider the purchaser's experience, understanding of the business and plans for managing it after the change in ownership.

The purchase structure

We look at the agreed purchase price, the buyer's contribution, any vendor finance and the proposed security arrangements.

The numbers after settlement

We assess whether the business is expected to generate sufficient cashflow to meet its operating commitments and repay the proposed lending.

See how businesses have used AcquisitionLine

LC
Hospitality – Tavern and bar operation

A new chapter for an established tavern

An established Bay of Plenty tavern was changing hands, with the purchaser arranging finance towards the agreed $450,000 purchase price.

The purchasing company was newly incorporated and had no trading history of its own. The tavern's latest financial year had also been softer than the previous one, with both revenue and earnings declining.

But the business remained profitable, and the purchaser had verified funds to contribute towards the transaction.

Line Capital assessed the tavern's trading performance, the purchaser's contribution and the proposed security arrangements. Although the most recent year's earnings were lower, projected debt servicing remained comfortably above the required threshold.

That wider assessment supported a secured AcquisitionLine facility to help complete the purchase.

Approx. $258,000
facility
48 months
term
Tavern acquisition
funding Purpose
READ THE FULL CLIENT STORY
Construction – Roofing subcontractor

Funding a management buy-out of an established roofing business

A management buy-out was underway for an established roofing business, with the seller providing $250,000 in vendor finance towards the purchase.

Despite a challenging trading year, Line Capital’s assessment of the business’s adjusted earnings, receivables and available security supported a secured AcquisitionLine facility to complete the transaction.

$310,800
facility
60 months
term
Management buy-out
funding purpose
READ THE FULL CLIENT STORY
Retail – Postal agency and convenience

Taking ownership of an established retail and postal agency

A purchaser was buying an established retail and postal agency for $395,000, contributing their own funds and seeking finance for the balance.

The business had a stable trading history and consistent earnings. Line Capital assessed its ability to service the proposed lending and approved a secured AcquisitionLine facility, subject to confirmation of the buyer’s contribution and settlement arrangements.

$195,000
facility
60 months
term
Retail business acquisition
funding purpose
READ THE FULL CLIENT STORY

What you'll need to apply

When you're purchasing a business, we need to understand both the operation you're buying and how you plan to take it forward.

The information required will depend on the acquisition and whether you're purchasing through a new company or an existing business.

start application
Sale and purchase agreement

The signed agreement setting out the business purchase, agreed price and transaction terms.

Business financial statements

Finalised financial statements for the business being acquired, including recent trading performance.

Current financial information

Management accounts where the latest financial statements are more than six months old, where available.

Business plan & forecasts

Your plans for operating the business after settlement, including financial projections.

Purchaser information

Relevant personal or business financial information, depending on the borrowing structure.

Funding & existing commitments

Details of your contribution towards the purchase, other funding arrangements and existing borrowing commitments.

Additional information may be required depending on the acquisition, the available financial records and the proposed security.

How AcquisitionLine works

01

Tell us about the acquisition

Share details of the business you're buying, the agreed purchase price, your funding requirements and how you intend to structure the purchase.

02

Provide the supporting information

We'll work through the financial information, sale and purchase agreement, business plan and other documents needed to understand the transaction.

03

We assess the acquisition

Our team reviews the business's trading performance, the purchaser's circumstances, proposed funding structure and ability to service the lending.

04

Review your offer

If approved, we'll provide an offer outlining the facility amount, interest rate, loan term, security requirements and any conditions.

Once the documentation is completed and all conditions are satisfied, funding can be arranged in line with the agreed settlement requirements.

AcquisitionLine FAQs

What types of businesses can AcquisitionLine help me purchase?
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AcquisitionLine is designed to finance the purchase of established trading businesses across a range of industries. This can include independent businesses, franchise resales, management buy-outs and acquisitions by existing business owners.

The business being acquired must meet Line Capital's lending criteria, including minimum trading history, turnover and serviceability requirements.

How much can I borrow to purchase a business?
+

AcquisitionLine can provide up to $500,000, depending on your circumstances and the proposed transaction.

The maximum available varies according to factors such as whether the purchase is being completed through a new or existing company, the security available and the amount of the purchase price being financed.

Do I need to contribute my own funds?
+

Generally, yes. AcquisitionLine can fund up to 70–85% of the purchase price, depending on the lending structure and borrower circumstances.

We also consider the overall funding arrangements, including any vendor finance. Each transaction is assessed individually.

Can I purchase a business through a newly formed company?
+

Yes. AcquisitionLine can accommodate acquisitions through newly established companies.

In these circumstances, the assessment focuses on the business being purchased, the purchaser's experience and financial position, and the proposed acquisition structure.

If an existing company is borrowing to purchase another business, additional trading history and financial requirements apply to that company.

Do I need to own property to qualify?
+

Not necessarily. AcquisitionLine can accommodate both homeowners and non-homeowners.

Property security may form part of some lending arrangements and can affect the amount available. Personal guarantees and security over business assets are also part of the lending structure.

What financial history does the business need?
+

The business being acquired must generally have at least three years of trading history and annual turnover of $200,000 or more.

We also consider its profitability, cashflow and ability to support the proposed loan repayments. Meeting the minimum trading requirements does not automatically mean the acquisition will qualify.

Can AcquisitionLine help with a management buy-out?
+

Yes. AcquisitionLine can be used to support management or employee buy-outs of established businesses.

We'll consider the business's financial performance, the purchaser's experience, the proposed ownership structure and how the acquisition will be funded.

When should I approach Line Capital about funding?
+

It's useful to start the conversation once you have a clear acquisition opportunity and understand the proposed purchase price and funding requirements.

A signed sale and purchase agreement is required for a formal application, alongside the financial information and business plan needed to assess the transaction.

You can still talk to us earlier to understand what information will be required.

Planning to buy a business?

Whether you're taking over an established operation, completing a management buy-out or expanding through acquisition, there's plenty to consider before the purchase is complete.

Talk to Line Capital about the business you're looking to buy and how you're planning to fund it. We can help you understand whether AcquisitionLine could be a suitable option.

Talk to Line Capital
Apply online

The information on this page is general in nature and does not take into account the specific circumstances of your business. Any lending is subject to Line Capital's lending criteria, assessment and applicable terms and conditions.

*Maximum funding amount, loan term and percentage of purchase price financed depend on the purchaser's circumstances, borrowing structure, security arrangements and lending assessment.

Line Capital Limited provides simple, hassle-free business loans up to $500,000 to help New Zealand businesses succeed.

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Email
contact@linecapital.co.nz
Phone
09 886 7014

Line Capital Limited – Auckland, New Zealand
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Line Capital Limited is a licensed financial service provider. FSP number: FSP1006107. Lending criteria, terms and conditions apply.