A second business acquisition, financed on positioning
See the deal breakdown on LinkedIn →
FGO Finance Group financed an operator's second business acquisition within 12 months of their first. The $1.8M acquisition was structured at 70% LVR, with a bank loan, a $300K vendor deferred payment repaid from business cash flow, and a $60K overdraft for working capital. With the first business still early in its operation, lender comfort came from positioning the operator, the structure, and the rationale clearly, not from chasing rate.
| Business | Education services |
|---|---|
| Finance type | Business acquisition finance with a vendor deferred payment |
| Acquisition price | $1.8M |
| LVR | 70% |
| Deferred payment | $300K |
| Overdraft secured | $60K |
| Context | Second acquisition within 12 months |
The situation: a second deal, soon after the first
The operator had completed their first acquisition within the past year and came to us with a second business already on the table. The first business was still early in its operation, and its trading was running differently to the original model. That timing made existing lenders cautious.
- First business settled in the prior 12 months, still in early operation
- A second opportunity surfaced shortly after, an established education services business
- Existing lenders were cautious given how recent the first deal was
- The real challenge was credibility, giving the credit team comfort the operator could carry a second business
How do you finance a second acquisition soon after the first?
The $1.8M acquisition was spread across more than one source rather than loaded onto the bank loan alone. The bank loan brought the deal to 70% LVR. A $300K vendor deferred payment, repaid from business cash flow, kept day-one borrowings down, and a $60K overdraft gave the business working-capital headroom from day one. That structure sat comfortably within lender appetite even for an operator early in their journey.
The structure was only half the work. We spent time preparing the operator for the lender application and the credit meeting, so the credit team could see the operator's management experience, the rationale for the second business, and how the structure protected the deal. Lender comfort on an acquisition is earned by positioning the operator, the structure, and the rationale clearly enough that the credit team sees the deal the way the buyer does. Rate is rarely what earns the yes.
Questions this deal answers
How is a business acquisition structured at 70% LVR?
By spreading the price across more than one source. On this $1.8M deal, a bank loan brought the lending to 70% LVR, alongside a $300K vendor deferred payment and a $60K overdraft for working capital.
Can you finance a second acquisition soon after the first?
Yes. Here the operator acquired a second business within 12 months of their first. The deal got done because the operator, the structure, and the rationale were positioned clearly enough for the credit team to get comfortable, despite how recent the first acquisition was.
What gives a lender comfort on an acquisition?
Positioning, more than pricing. Clear evidence of the operator's management experience, a sound deal rationale, and a structure that protects the lender will do more than chasing the lowest rate.
Thinking about acquiring a business? Read about how FGO approaches business acquisition finance, or browse more client case studies. For the full guide on loan types, deposit requirements, and what lenders assess on an acquisition deal, see How to Finance a Business Acquisition in Australia.
Your deal deserves the same outcome
Every result here started as a conversation. Whatever you're financing, we'll look at it properly and tell you honestly what's achievable.