Commercial finance brokers are struggling to find lenders prepared to fund business acquisition deals, according to the findings of a survey.
A third of brokers expressed difficulties, while two in 10 said they found it hard to secure the right loan value for potential purchases.
The findings emerged from a survey by Asset Advantage, a provider of business finance for SMEs.
Brokers also revealed challenges with securing all the necessary information, as well as understanding both the mechanics behind acquisitions and the appetite of funders.
The challenges brokers face mean that 43% had been unsuccessful in obtaining funding for business acquisitions.
Speaking to Asset Advantage, one broker said: “Acquisition finance lenders tend to be split in the sub-£250k and over £1m. Those funding less than £250k struggle to get their heads around the deal and kill the deal with volume of information required. Those above £1m can be difficult to build relationships with and their debt quantum can be restrictive.”
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Philip Knight (pictured), credit and risk director at Asset Advantage, said: “Even in the challenging climate of the last couple of years, the strategic need for acquisitions and MBOs [management buyouts] continues – as does the need for help funding these deals.
“Our latest research highlights a real issue though, with commercial brokers being held back by lender appetite, loan values and in some cases, a lack of knowledge to capitalise on these deals or find the right lenders.”
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