Usually by OCF. In some cases, you'll see that a searcher structures an attractive Earn Out that would need to be financed by raising additional debt when the payment is due (at time of acquisition the bank should already have approved that).

Earnouts are usually funded through operating cash flow, which makes sense since they’re tied to business performance. If structured well, they shouldn’t require additional financing. Escrows or holdbacks can be useful for protecting against downside risk, while debt or follow-on equity are less common and usually a last resort. The key is ensuring incentives align so the business can naturally support the payout.