Business Acquisition
What Is a Lender Commitment Letter for an Acquisition?
1) What a Commitment Letter Does
In plain terms, it confirms the lender’s intent to fund subject to stated conditions. It helps you negotiate with the seller, coordinate diligence, and plan closing steps.
It also exposes the real constraints early: leverage limits, covenants, collateral expectations, and closing deliverables.
2) What Should Be Inside
| Section |
Why it matters |
Risk if vague |
| Facility size and structure |
Defines senior debt, any tranche split, amortization logic |
Last-minute resizing can break the equity plan |
| Pricing and fees |
Sets the true cost of capital and closing costs |
Surprises appear at closing and delay approval |
| Collateral and guarantees |
Clarifies lien package and sponsor support |
Hidden guarantees can kill buyer appetite |
| Conditions precedent |
Lists diligence and documentation required to fund |
Open-ended CPs turn into moving goalposts |
3) The Most Common Failure Point
Problem:
the buyer treats a soft indication as a commitment.
Fix:
get the core terms in writing, then run diligence against the stated CPs. If the lender is not willing to write down conditions, the “approval” is not mature.
4) Where Financely Fits
Financely runs acquisition financing as a structured lender process, with a lender-ready package, coordinated outreach, and term sheet workflow.
Start with: SMB acquisition finance
and our overview of small business acquisitions.
Request Indicative Terms
Share your LOI or purchase agreement, target summary financials, and buyer profile. We will revert with likely lender structures and what a commitment letter should cover for your deal.
For process expectations, see How It Works.