How is the purchase financed. Most leveraged buyouts for small and medium-sized businesses generally require two types of financing. The buyer needs funds to acquire the business. They also buy email database need some financing to operate and expand the business. The type of debt used to acquire the business depends on several variables , such as the financial health of the buyer and seller, their reputation, and the size of the transaction.
Larger transactions involving well-known companies commonly use a combination of bonds.senior financing, and conventional bank loans. On the other hand, smaller transactions or those involving companies that are not well known tend to use alternative financing options. These options include: 1. Seller Financing – Many small to medium size LBO transactions have a seller financing component.