A partner or shareholder buy-out is usually funded with a loan over 3 to 7 years, with the company itself as the borrower. It lets a departing co-founder or shareholder exit cleanly, while the people staying on keep control of the business.
How it usually works
- The company borrows and uses the money to buy back the departing person's shares, or a new holding company buys them.
- The debt is repaid from the company's own cash flow over the term.
- The leaving partner may defer part of the price, which reduces the borrowing. See What is vendor finance?.
What lenders look at
- whether the business can carry the repayments from its profits after the partner leaves
- whether anything the departing partner brought, such as key customers or skills, leaves with them
- who's staying, and their track record
- the agreed price, and how it was worked out
Get the legal side right
Check your shareholders' or partnership agreement for any rules on how a departing partner's stake is valued and sold. Company share buy-backs have their own legal requirements. Speak to your solicitor and accountant.
Last reviewed: 8 October 2026