Management Buyout

Tailored funding solutions for management teams buying the business they help run

What Is Management Buyout Finance?

Management Buyout (MBO) finance is used by an existing management team to purchase the business they currently operate, typically from a founder, owner, or parent company. It allows managers to transition into ownership using a mix of external finance, personal investment, and deferred consideration.

MBOs are a popular route for business succession and exit planning — enabling continuity, minimising disruption, and aligning leadership with long-term ownership goals.

Common reasons for a management buyout include:

  • Retirement or exit of the existing owner

  • Divestment of non-core business units

  • Private equity-backed growth strategies

  • Founders wishing to step back while preserving legacy

  • Restructuring or turnaround opportunities

Types of MBO Finance

At The Funding Group, we offer a range of finance options tailored specifically for management buyouts, with flexible structures that reduce risk and maximise deal success:

Senior Debt

Secured loans against the business’s assets or cash flow. Often the core element of MBO funding.

Cash Flow Lending

Unsecured finance based on the business’s profitability (EBITDA). Suitable for strong, established companies.

Vendor/Deferred Consideration

The seller agrees to receive part of the payment over time. Reduces upfront funding requirements and supports smoother transitions.

Mezzanine Finance

A hybrid of debt and equity. Fills funding gaps where senior lending or personal investment fall short.

Private Equity or Investor Support

External investors may provide funding in exchange for equity — especially useful for high-growth or larger MBOs.

Bridging Loans

Short-term finance to complete time-sensitive MBOs while arranging long-term funding or refinancing.

Typical Terms & Key Features

  • Loan Amounts: £250,000 to £25 million+

  • Loan-to-Value (LTV): Up to 90% (depending on deal structure)

  • Term Length: 1 to 7 years (bridging options from 3 to 24 months)

  • Interest Options: Fixed, variable, or rolled-up

  • Security: Usually secured against the business or external property/assets

  • Completion Time: Indicative terms in 2–5 days; completion in 4–8 weeks

We work with a diverse panel of UK lenders and investors to structure the right solution for your team and transaction.

Who Can Use MBO Finance?

MBO finance is suitable for:

  • Existing management teams across all sectors

  • Directors and senior leadership groups

  • Private equity-backed managers

  • Joint ventures and special purpose vehicles (SPVs)

  • Teams with limited personal capital but strong commercial track records

  • Business owners looking to exit to an internal team

Even if your team doesn’t have the full deposit or experience raising capital, we can help structure a viable, fundable proposal.

Benefits of MBO Finance

  • Business continuity with trusted leadership

  • Motivated ownership from an aligned, experienced team

  • Flexible funding to support smooth handovers or phased exits

  • Lower risk for sellers with familiar buyers and retained talent

  • Support for strategic growth, investment, or restructure

  • Multiple funding sources available with our lender network

  • Hands-on support throughout structuring, negotiation, and completion

MBOs can be complex — we guide you through every stage, helping you manage lender expectations, mitigate risk, and secure the right funding structure.

Ready to Finance a Management Buyout?

If you’re part of a management team looking to buy out a business owner or investor, we can help you access the finance you need — even if you have limited upfront capital.

Contact The Funding Group today for a no-obligation consultation and explore your funding options.