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Buying a business

Acquisition adviser fees: what you pay for and when you need an adviser

Acquisition adviser fees are usually a retainer, a success fee or a fixed fee. Who does what, when you need an adviser and what your lender still checks.

Reading time 5 min read
Category Business guides
Written by The bizbritain team
Acquisition adviser fees usually take one of three shapes: a retainer, a success fee paid when the deal completes, or a fixed fee. You do not always need a buy-side adviser to buy a small business. You will almost always need a solicitor and an accountant. And no adviser can make a lender say yes.
This guide is for someone buying their first business and wondering who they need on their side. It explains what each adviser does, how they usually charge and what a lender will still check.

Section 01

Who does what when you buy a business

Four kinds of adviser can be involved. They do different jobs, and one rarely covers another.

  1. Acquisition adviser

    Also called a buy-side or corporate finance adviser. They can help you find a business, value it and negotiate the price and terms. On a larger deal they often run the whole process.

  2. Solicitor

    Your solicitor drafts and negotiates the sale agreement. They run the legal due diligence. They also deal with the lender's documents.

  3. Accountant

    Your accountant checks the figures. That means financial due diligence, tax and how the deal is structured.

  4. Finance broker

    A broker looks for the funding. They put the deal in front of lenders and help structure the finance around it.

Some firms offer more than one of these. Ask which jobs are included before you sign anything.

Section 02

Do you need an acquisition adviser at all?

Not always. Plenty of first-time buyers find a small business themselves and agree the price directly with the seller.
An adviser tends to earn their fee when the deal is harder. That might be a competitive sale, a business with several sites or a price you are unsure how to test. It might also be a seller who has advisers of their own.
The solicitor and the accountant are a different matter. Skipping legal or financial due diligence to save money is a risk. Most lenders will expect both to have been done before they release funds.

Section 03

How do acquisition adviser fees work?

Acquisition adviser fees are usually agreed in an engagement letter at the start. There are three common shapes, and some advisers combine them.
  • Retainer: A fee paid at the start, or each month, while the adviser works on the deal. Ask whether it is refundable and whether it comes off a later fee.
  • Success fee: A fee paid only if the deal completes. It is often a percentage of the price.
  • Fixed fee: One agreed price for a defined piece of work, such as a valuation or a review of one business.
Before you sign, ask four questions. What exactly is included? When is each fee due? What do you pay if the deal falls through? Is the adviser paid by anyone else in the deal?
Solicitors and accountants usually quote separately, either a fixed fee or an hourly rate. Budget for them early, because their bills arrive around completion.

Section 04

What your lender will still ask for

An adviser can find the business and negotiate the deal. The lender still makes its own decision.
Myth 01

“A good adviser can get the lender to say yes”

A lender looks at the accounts of the business you want to buy. It looks at your experience in the sector and how much of your own money goes in. It also looks at the due diligence. An adviser can help you prepare all of that. They cannot replace it.

The numbers still have to work.

If you are weighing up paid help before you start, our guide to business buying programmes and acquisition mentors covers courses and mentors. For the full cost of a deal, see how much acquisition finance costs.
For the funding itself, an acquisition finance broker can look at the deal across a wider range of lenders. That is the job bizbritain does. On advisory deals we take no commission from lenders.
You pay bizbritain nothing unless a lender on our panel issues an Agreement in Principle. Only then do we send our engagement letter. Our success fee is payable only on drawdown.

This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.

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