What is 'Acquisition Financing'

Acquisition financing is the capital that is obtained for the purpose of buying another business. Acquisition financing allows the user to meet their current acquisition aspirations by providing immediate resources that can be applied toward the transaction.

BREAKING DOWN 'Acquisition Financing'

There are several different choices for a company that is looking for acquisition financing. A line of credit or a traditional loan are the most common choices. Favorable rates for acquisition financing can help smaller companies reach economies of scale and is generally viewed as an effective method for increasing the size of the company's operations.

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RELATED FAQS
  1. What are some ways of financing an acquisition?

    Learn about how business acquisitions are financed, from using private equity funds to receiving huge acquisition loans from ... Read Answer >>
  2. How do I evaluate whether a company is a good acquisition candidate?

    Evaluate whether a company is a good acquisition candidate by analyzing its price, debt load, litigation and financial statements. Read Answer >>
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    Learn about the difference between mergers and acquisitions. Discover what factors may encourage a company to merge or acquire ... Read Answer >>
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    Read about the legal and practical differences between a corporate merger and corporate acquisition, two terms often used ... Read Answer >>
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