Hi all,
Posting this hypothetically as I'd like to understand what options exist before committing to anything.
Imagine a UK-based service business turning over £2m+ per year. EBITDA has been around 9% for the last 12 months, and 11% and 15% in the two years prior — so margins have compressed a bit but the business is profitable and trading.
The owner is in the early stages of exploring a partial or majority sale — nothing imminent, but the process is underway. The challenge is that there's a cashflow gap right now of roughly £100k that needs bridging while the longer-term deal gets sorted.
One option being considered is whether a serious prospective buyer might be willing to inject that £100k upfront — essentially as an early show of commitment — before the full sale process formally kicks off. Whether that would be structured as a loan, a deposit against the eventual deal, or a small initial equity stake, we're not sure. Has anyone seen this kind of arrangement done in practice? And if so, how was it typically structured to protect both sides?
Beyond that, are there other realistic options for accessing £100k relatively quickly in this situation — secured against the business's performance or the anticipated sale proceeds? A specialist lender, a private investor, a broker?
Keen to hear from anyone who has been through something similar or works in this space. Thanks in advance.