Jurisdiction(s):
United Kingdom

Key definition

Acquisition finance definition

What does Acquisition finance mean? acquisition finance is the debt and/or equity raised to fund the purchase price and costs of an acquisition. It is a market term, not defined in legislation or case law, and is used across corporate, banking and leveraged finance practice. Funding may include bank term and revolving facilities, private credit/direct lending, bridge-to-bond loans, high‑yield bonds, mezzanine, vendor loan notes, and equity (for example, a share issue or private subscription). In leveraged buyouts it is commonly secured on the buyer/target group with upstream and cross‑stream guarantees, subject to corporate benefit, distributions rules and financial assistance restrictions. Across England & Wales,...

Interim (Bridge) Loan Agreements in Acquisition Finance: Purpose, Availability, Key Terms, Security, Conditionality, Transferability and Replacement

Published by a LexisNexis Banking & Finance expert

Practice notes

What are interim loan agreements?

Interim loan agreements are concise loan contracts put in place as a bridge until the full suite of finance documents is settled.

When and why are interim loan agreements used in acquisition finance transactions?

They are commonly adopted where a target group is being sold via an auction process, or where the timetable to completion is otherwise compressed. In such competitive, accelerated scenarios, the window to negotiate and execute complete finance documentation is curtailed. In addition, ‘certain funds’—while not a strict legal prerequisite in private acquisitions—is frequently expected, and interim loan agreements are regarded as a clear demonstration that funding is readily available (for further details on certain funds, refer to the introductory guide to leveraged finance facilities agreements—utilising, repaying and prepaying the facilities). Where a target sale proceeds by auction, bidders compete to show the vendor they can close swiftly. Having committed financing through an interim loan agreement is seen as advantageous by both vendors and buyers...

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Web page updated on 21/05/2026

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