Portuguese banks don't finance leveraged buyouts?

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April 29, 2024

by a searcher from Belarussian State Economic University in Лиссабон, Португалия

Dear colleagues,‌‌

I did some research and couldn't find out that there is an equivalent of the US SBA program in Portugal (it helps to finance buyouts of existing businesses by private entrepreneurs with more favorable terms or more flexible underwriting criteria than conventional loans).
I'm afraid there are no such analogs, but I would still like to clarify this point with more experienced professionals like you. If I'm wrong, please tell me,

- In which banks (or other institutions) and on what conditions could they be provided?

- Have there been any cases of buying out a business with the help of bank loans in your practice?

Any thoughts and ideas you have on this topic would be greatly appreciated.


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Reply by a searcher
from ESCP Europe in Lisboa, Portugal
Hi. Unfortunately your’re right. At the moment there is no alternative to commercial banks, that are also not very keen to look at this kind of deals. They prefer real estate. There was a program financed by the state owned Banco de Fomento. Basically a reinsurance line that allowed borrowers to increase LTV and reduce interest. But it closed in 2022 and since then there is no information about if and when it will reopen. I think that in Portugal the best way to finance an ETA acquisition is to private lenders.
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Reply by an admin
from Massachusetts Institute of Technology in Portland, OR, USA
^redacted‌ might be able to help here or benefit from the replies of others in Iberia.
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+1 more reply.
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