Buying a business in 2026: how acquisition finance actually works
Mike Ashley just bought Harvey Nichols out of administration. You do not need his balance sheet to buy a business, but you do need the same three moves: find the deal, structure the finance, and run it.
Reading time6 min read
CategoryBusiness guides
Written byThe bizbritain team
Mike Ashley's Frasers Group has just bought Harvey Nichols out of administration, a whole department store chain picked up as a going concern rather than built from nothing. It is the most visible example this month of a move that quietly runs through the whole economy: the fastest way into a business is often to buy one that already exists. You do not need a listed retailer's balance sheet to do the same thing at a smaller scale, but you do need to understand how an acquisition gets paid for.
Section 01
The distressed-asset playbook, translated
When a large group buys a struggling brand out of administration, it is doing three things at once: spotting value the current owner cannot unlock, moving faster than a slow buyer can, and structuring the purchase so the business itself helps pay for the deal. The same logic applies to a profitable plumbing firm whose owner wants to retire, a printer with steady contracts and no succession plan, or a care home that needs fresh capital to grow.
The backdrop matters. A large slice of the UK's businesses are under real financial pressure right now, which means more owners are open to a sale and more assets are changing hands below their long-run value. For a prepared buyer with the right finance behind them, that is a market full of opportunities rather than a warning sign.
674,030UK businesses in significant financial distress, Q2 2026 (Begbies Traynor Red Flag Alert)
53,756in critical financial distress, up 9% on the year (Begbies Traynor, Q2 2026)
£40mreported price Frasers paid for Harvey Nichols out of administration (Bloomberg, August 2026)
48%Frasers' enlarged stake in Hugo Boss after a rejected full takeover bid (August 2026)
Section 02
The three moves in every acquisition
Strip away the headline numbers and a business purchase is the same shape whether the target costs forty million or four hundred thousand. Get these three in the right order and the finance conversation becomes straightforward.
Find the deal
Look for a going concern with real revenue, a reason the current owner is selling, and something you can improve. Retirement, ill health and succession gaps produce far more sales than public listings ever do.
Structure the finance
Almost no acquisition is paid for in one lump of cash. It is a stack: some of your own money, some borrowed against the business, and often some left in by the seller. How that stack is built decides whether the deal is affordable.
Run the business
Lenders back buyers who can operate what they are buying. A credible plan for the first hundred days, and evidence you understand the sector, does more for an application than a polished spreadsheet alone.
Section 03
How an acquisition actually gets financed
The finance behind a business purchase is rarely a single product. It is usually a combination, and the art is matching each part of the deal to the type of funding that suits it best.
Senior or structured lending forms the backbone, borrowed against the target's assets or its reliable cash flow. Vendor, or seller, finance is where the seller agrees to be paid part of the price over time, which keeps them invested in a smooth handover and reduces what you need to borrow on day one. Asset-based lending releases money tied up in stock, equipment or unpaid invoices. And a growth loan can cover the working capital the business needs in its first months under new ownership.
Most first-time buyers do not know which combination fits their deal, because they have only ever done this once. That is the whole point of using a broker: matching the parts of a deal to the lenders most likely to say yes is the job.
Section 04
Why the high-street bank is the wrong first call
The instinct is to walk into the bank you already use. For an acquisition, that is usually the slowest route to a no. High-street banks tend to cluster around a narrow set of criteria, they are cautious about lending to a first-time buyer taking on a business they have not run before, and a single decline can cost weeks you may not have when a seller wants to move.
A broker works the other way round. bizbritain sits on the buyer's side of the table, looks at a deal across a wide panel of specialist lenders, and puts the application where it has the best chance rather than where you happen to hold a current account. Whether any particular deal can be funded still depends on your circumstances, the business you are buying and each lender's criteria, but starting with one bank throws away most of the routes available to you.
A broker exists to open those routes at once. bizbritain arranges business acquisition finance through specialist lenders. The deal goes where it has the best chance of approval. Do the target’s accounts look weak on paper? Our guide to when accounts don’t tell the whole story covers how lenders read the rest.
This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.
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