SHAREHOLDER EXIT FINANCING – STRUCTURED FUNDING FOR A SMOOTH TRANSITION
Shareholder exit financing is a specialist funding solution designed to help businesses facilitate the departure of a shareholder without disrupting cash flow or depleting company reserves. Whether due to retirement, restructuring, or a buyout, securing external capital ensures a seamless transition while allowing the business to continue operating efficiently.
This type of financing is most commonly used by professional service firms, but other industries may also qualify under the right circumstances.
How Does Shareholder Exit Financing Work?
1. Initial Consultation & Assessment
The first step is to discuss your specific situation and determine the best approach to structuring the buyout financing. During this stage, we will:
- Assess the shareholder’s stake and the business’s ability to fund the buyout.
- Discuss the company’s financial health and cash flow position to determine affordability.
- Identify the best financing structure (whether a term loan, structured repayment facility, or alternative funding solutions).
📌 Timeframe: Typically 1–3 business days.
2. Loan Application Submission
Once we determine the right structure, the next step is to submit the formal application along with supporting documentation.
Documents Required:
- Business Details: Company registration number, name, and address.
- Shareholder Buyout Agreement: The terms of the shareholder’s exit and the amount required for the transaction.
- Financial Statements:
- Full set of latest filed accounts (minimum past two years).
- Up-to-date management accounts (typically the last three to six months).
- Bank statements (last three months).
- Any existing loan or credit facilities.
- Shareholder Structure: Breakdown of ownership, including any equity splits.
- Business Trading History: Minimum of two to three years in operation (industry-dependent).
- Director & Beneficial Owner Information: Details of shareholders with a 25%+ stake (including proof of ID).
📌 Timeframe: Depending on how quickly documents are submitted, this process takes between 2–5 business days.
3. Credit Review & Approval
Once submitted, the application is reviewed by our underwriting team, where they assess:
- The business’s ability to service the loan based on cash flow and revenue.
- The financial health of the company and repayment affordability.
- The structure of the buyout and whether alternative financing may be better suited.
📌 Timeframe: Approval typically takes 5–10 business days, depending on complexity.
4. Loan Offer & Agreement
If approved, we will issue a formal offer outlining:
- Loan Amount & Repayment Terms.
- Interest Rate & Fees – Typically fixed, but may vary depending on risk.
- Any personal guarantees required (if applicable).
Once the terms are accepted and signed, the final compliance checks are completed.
📌 Timeframe: This step takes 1–3 business days.
5. Fund Disbursement
After signing, funds are released directly to the business account or as per the agreed transaction structure. Businesses can then proceed with the shareholder buyout as planned.
📌 Timeframe: Typically within 24–48 hours after final approval.
Estimated Total Timeline: 2 - 3 weeks
The process from initial consultation to funding typically takes between 10–15 business days, but can vary depending on how quickly documents are provided and the complexity of the transaction.
How Does Shareholder Exit Financing Work?
✔ Preserve Company Capital – Avoid draining reserves and maintain financial stability.
✔ Flexible Loan Structures – Custom repayment terms to fit business cash flow.
✔ Reduce Immediate Financial Pressure – Spread the cost of a shareholder buyout over time.
✔ Maintain Business Continuity – Ensure a seamless transition without disrupting operations.
✔ Available Across Multiple Sectors – While most commonly used in professional services, businesses in other industries may qualify.
Who is Shareholder Exit Financing For?
This facility is suitable for businesses that:
- Need to fund a shareholder’s exit while keeping company capital intact.
- Operate in professional services (law firms, accountancy, medical practices, etc.), but other sectors may be eligible.
- Require a structured loan facility to manage buyout costs effectively.
- Want expert guidance on the best financing strategy for their unique situation.
Let's Discuss Your Exit Strategy
Every shareholder exit is different. Speak with us today to explore the most effective way to finance a buyout, ensuring a structured and strategic approach that supports long-term business success.
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HOW IT WORKS
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FAST APPLICATION IN SECONDS!
You’ll share basic information about you, your business and finance requirements. Either apply online or call us on 0161 791 4601.
GET YOUR FREE QUOTE
We’ll ask for some more information regarding your businesses and tailor the best solution to meet your needs.
GET FUNDS FAST!
Once approved, we’ll get funds to your preferred business bank account or pay a supplier on your behalf.
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