Succeeding in entrepreneurship through acquisition

If your route to entrepreneurship lies in acquisition rather than a start-up, we can support you in raising the debt finance you’ll need to progress your Search Fund journey.

Our experienced Corporate Lending Team can arrange flexible finance solutions to fund your acquisition through a tailored debt package that sits alongside your equity funding. We assess every enquiry individually and work with advisors, accountants, SMEs, sponsors and searchers to create bespoke solutions that enable you to achieve your ambition.

Find out how we support searchers in their Search Fund journeys.

Men In Factory

What is a Search Fund?

Search Funds provide a route to entrepreneurship for ambitious individuals who possess the necessary skills for entrepreneurship, but recognises the benefits of focusing their journey on acquiring an existing, established business that they can grow, rather than starting from scratch. The searcher seeks commitment and capital from a pool of investors to fund the search phase where they identify an SME to acquire.

Once identified and terms have been agreed, the searcher will typically need to source a debt package to sit alongside their equity funding to finance their purchase. They’ll then operate the business as CEO, backed by the existing management team to accelerate its growth. The searcher benefits from performance linked equity and a CEO or Executive position in the acquired entity. They also build their career in entrepreneurship with the support and backing of experienced investors.

What are the benefits of Entrepreneurship Through Acquisition?

  • Offers a route to entrepreneurship and equity participation for those individuals wanting to grow existing businesses rather than starting from scratch
  • The ability to acquire a cash generative SME with a proven track record
  • Support from an experienced group of Investors
  • Performance linked equity and an accelerated career path
  • Financial support through the search period

 

What we look for in a Search deal

As a leading provider of debt finance in the Search Fund space in the UK, we’re uniquely positioned to support high-calibre searchers in their journey to entrepreneurship through acquisition.

  • Meaningful Equity contribution to support the transaction
  • Credible and experienced searcher with relevant industry or related experience to set them up for success in their acquired company
  • Retention and incentivisation of key existing management team within the business being as they will be integral in helping to deliver the strategy
  • Overall positive view of the market conditions in which the target acquisition operates including features like high barriers to entry, defensible markets and niche propositions
  • Track record of stable margins and profitability with quality finance function and robust information and reporting
  • A strategy of cultural integration and retention and incentivisation of key staff

Funding for Search Funds at a glance

Our funding is available for UK based Limited companies operated by a high-calibre searcher, seeking debt finance as a component of their funding mix to support the acquisition of a cash generative SME.

  • Loans of £2m to £20m
  • Typically a mix of amortising and bullet loan tranches but can also include elements of asset based lending
  • Typical term of 5 years
  • Requires an appropriate balance of equity to debt to ensure aligned interests
  • Can provide initial capital repayment holidays to allow a ‘settling in’ period
  • Potential for committed and uncommitted follow-on funding to support growth strategy
  • Bespoke solutions with each case assessed individually
People Walking In Factory

The benefits of working with us

  • Relationship: A dedicated relationship led approach as part of a smaller portfolio managed by likeminded entrepreneurs who’ll assist you throughout your journey
  • Certainty: Support from a team experienced in Search Fund transactions providing certainty of funding
  • A fast-track to entrepreneurship through acquisition of a cash generative SME
  • Quick decisions with short lines of communication direct to decision-makers
  • Flexibility: A tailored and flexible funding structure that is specific to the unique needs of your acquisition
  • Funding part of the acquisition through debt enables you to retain a greater amount of equity in the target entity giving better returns to investors
  • Support for future growth through committed or uncommitted accordion facilities
People In Office

How do I find out more about Search Fund finance?

At Shawbrook, we have worked with a number of searchers as they embark on their journey to entrepreneurship. 

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We can offer funding lines from £1 million

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