Acquisition Financing

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DEFINITION of 'Acquisition Financing'

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.

INVESTOPEDIA EXPLAINS '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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