This is how you finance your business acquisition

The potential to grow through acquisitions is great, but it can be difficult to get access to the capital required to succeed. With today's capital adequacy rules, banks are often reluctant to finance small and medium-sized companies. However, there are other, more flexible, financing options available than traditional bank loans. By offering acquisition financing when the banks do not, Kreditfonden contributes positively to Sweden's development and growth, because the possibility of making important acquisitions is based on access to capital.

What is the advantage of acquiring instead of growing organically?

Instead of starting up a new company in a new market, it may be smarter to buy a similar business, with an existing customer base and developed local collaborations. Right now, there are also many profitable and well-run companies on the market that are undergoing a generational change, which creates good potential for takeovers. Through acquisitions, the company can quickly bring in new expertise and expand faster than through organic growth, which is often desirable in order to maintain or increase its competitiveness.

How is the financing done?

Acquisition financing is the capital that is acquired for the purpose of buying another company. Such a financing arrangement often consists of several different types of capital, which can be both costly and time-consuming. - We strive for short lead times and want to be a "one-stop shop" with a lower total cost for the borrower, says Fredrik Sjöstrand, CIO and co-founder of Kreditfonden.

Kreditfonden's investment philosophy is based on making it easier for small and medium-sized companies to expand and develop. At the same time, unique investment products are created with low or no correlation with other markets. Direct loans are an asset class that has grown in popularity since the financial crisis and subsequent regulations, where stricter demands have been placed on banks. In terms of financing, this type of loan can be directly decisive for a company's ability to succeed in its growth strategy. - Acquisition financing is an important part of our strategy to support well-run Nordic companies with financing for continued strong growth, says Fredrik Sjöstrand.