New Pod EP: UK Debt Deep-dive with a former PE Exec-turned Searcher

searcher profile

April 26, 2024

by a searcher in United Kingdom

The topic of UK SME debt financing is a popular one in the ETA community. We've previously spoken with lenders and debt advisors, but today we bring you a different perspective from an experienced private equity professional-turned-searcher, ^redacted‌.

After consulting with the leading cash flow lenders in the UK SME sector, Scott aggregated and analyzed the typical terms across the debt finance landscape.

Scott articulates his findings with clarity and a deep understanding of the subject. Thanks, Scott, for sharing. Listeners are going to love this episode!


Listen here: Spotify or Apple


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UK Searchers, join the next Buy and Build Search Accelerator to learn from the best in UK SME deal origination, financial forecasting, debt fundraising, equity fundraising, and completing acquisitions. Join like minded peers that are embarking on the same journey in the June cohort.

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commentor profile
Reply by a lender
in United States
From bank to bank, deal to deal, my experience as a direct SBA preferred lender showed that some (not a lot and not often) banks were open to negotiating terms and rates, while others flat-out refused to budge. I now independently source SBA-backed funds for eligible acquisition deals to pivot toward more options. I was tired of losing deals to other banks back in the day because decision-makers wouldn't compromise on the acquisition package presented. The stronger the seller and buyer, the more options you have. Stonger defines buyer cash on hand, proven historical cash flow of the listing, credit, and collateral.

However, buyers who aim to invest minimal personal cash and work the system before applying to not have equity available in real estate owned to avoid subordinate liens shouldn't expect the best rates and terms from bank lenders. It's all about balancing risk and reward—common sense. The more you commit, the more the bank will consider.

On the flip side, watch out for SBA loan term sheets tied to business listings pitched by certain BDOs. They might entice buyers with low interest rates without fully understanding the deal's strength from the buyer's side, only to reveal higher rates when the commitment letter is issued. Thanks for the tag ^redacted‌
commentor profile
Reply by a searcher
from Columbia University in London, UK
‌Thank you ^redacted‌ for the tag. Interesting conversation and good overview of the market. As the podcast highlights, the UK market is certainly different to the North American and Continental ‌European debt markets - both in terms of structuring, covenants and pricing. Also as highlighted, MBI lending market is pretty concentrated to the specialised lenders - especially at this point of the business cycle. Thanks for sharing your thoughts ^redacted‌ and best of luck with your search!
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