Business Acquisition Gap Financing Solutions

Acquisition Finance

Gap Financing Solutions For Business Acquisitions

You have an LOI or purchase agreement. Senior debt is sized. Seller is ready.

The only thing missing is the equity check or subordinated layer that makes the capital stack close.

Financely structures and places gap financing for business acquisitions using mezzanine debt, preferred equity, structured sponsor equity, and bridge capital.

What “Gap Financing” Means In Acquisitions

Gap financing is the capital layer between senior debt and the buyer’s cash equity. It is used when the buyer cannot or does not want to write the full equity check required by the senior lender.

Common drivers:

  • Senior lender caps leverage below purchase price
  • Buyer wants to preserve liquidity
  • Seller rollover is limited
  • Closing timeline is tight

Structures We Arrange

Mezzanine Debt

Subordinated debt behind senior lender. Higher yield, often includes warrants or PIK interest.

Preferred Equity

Equity-like capital with fixed return and priority over common equity.

Structured Sponsor Equity

Third-party equity with return hurdles and control protections.

Bridge Capital

Short-term capital to close while permanent capital is raised.

Typical Deal Profiles

Metric Typical Range
Enterprise Value $5M to $100M
EBITDA $1M+
Gap Size $500k to $15M
Industries Services, manufacturing, distribution, software, healthcare, logistics

What Makes A Gap Capital Provider Say Yes

Quality Of Cash Flow

Recurring revenue, diversified customers, defensible margins.

Post-Close Liquidity

Buyer must retain working capital after closing.

Senior Debt Terms

Reasonable covenants, no structural traps.

Sponsor Track Record

Operators who have closed and run businesses before get better terms.

How Financely Works

Financely operates as a transaction-led capital advisory and distribution desk. We structure the gap layer, build a lender-ready package, and distribute to private credit funds and specialty capital providers.

If you are unfamiliar with how private credit works, start with What Is Trade Finance and our overview of Trade Finance Services. Many acquisition financings combine cash-flow loans with asset-based or receivables-backed structures.

If a credit enhancement is required, see How To Raise Capital Using A Standby Letter Of Credit.

Our Process

1. Feasibility

Review LOI/APA, financials, and senior debt terms.

2. Structuring

Design gap instrument and economics.

3. Packaging

Build credit memo and investor deck.

4. Distribution

Targeted outreach to qualified capital.

Who This Is Not For

  • No LOI or signed purchase agreement
  • No financial statements
  • Businesses with unstable or collapsing cash flow
  • Buyers with zero post-close liquidity

Submit Your Acquisition

If you have an LOI or signed purchase agreement and need gap capital to close, submit your deal for feasibility review.

This content is informational only. Financely is not a bank, not a broker-dealer, and not a direct lender. All transactions are subject to diligence, KYC, KYB, AML, sanctions screening, capital provider criteria, and definitive documentation.