How can Invoice Finance help a MBO

How can Invoice Finance help a MBO

At some point, there comes a time when you’re sick of working for the man. You know the business inside out, you have years of experience under your belt, and you’re so friendly with your fellow employees that you just scored an invite to a colleagues family party. At this point, you should definitely be flirting with the concept of a self-initiated MBO.

MBOs explained
Short for Management Buyout, MBOs are a type of business acquisition that see a company’s existing managers obtain a significant chunk of the business. It’s handed down either by private owners, or the parent company. The concept shot to fame in the 1980s, and has continued to endure as a lucrative solution for managers who feel like they can do a better job at running the business than its current owners.

Of course, often it’s the same private owners or the parent companies that keep the business afloat. Which means that if you’re going to facilitate a MBO, you’ll need to arm yourself with a lot of cash. This is where invoice financing steps in.

Over the past few years, invoice financing has emerged as a smart solution for businesses wanting to fast-track their accounts receivable debts. It’s been particularly helpful in keeping SMEs afloat, especially in the wake of crushingly long payment terms handed down to suppliers. Now, invoice financing is making its mark in the MBO arena.

Bolster your buyout

So how can invoice financing bolster your buyout? Basically, providers like Global Asset Finance Limited and its partners empower you with the flexibility to release the cash that’s locked up in your sales ledger. If cash-flow isn’t an issue this process acts as a cost-effective way to raise money for your business, as you can then use the extra capital to fund your final buyout and inject capital into your business.

Alternatively, you can speak to your existing finance providers about negotiating a better invoice percentage rate, or transferring to a competitor. Chances are, they’ll be willing to listen and help your business.

After you’ve signed on the dotted line, invoice financing will continue to offer you more control and flexibility as you find your footing as the company’s new owner.

Supporting the entrepreneurial spirit

While MBOs aren’t exactly start-ups, they do fall into the entrepreneurial category. They’re fuelled by passion, vision and a genuine desire to improve. This entrepreneurial spirit is what the alternative finance revolution is all about, so it makes sense that invoice financing slots neatly into the MBO picture.

Want to find out more about how Global Asset Finance Limited and its partners smart cash-flow finance can help scaffold your MBO and empower you with the cash you need to grow your newly acquired business?

Get in touch with one of our friendly agents today to chat about alternative-finance, and everything in-between.




Categories: Invoice Finance Services