Building your bank financing application
Introduction
You have found the ideal business to acquire on Leez. The price has been negotiated, the seller agrees. But a crucial question arises: how to finance this acquisition?
For the majority of acquirers, bank credit remains the main solution. However, obtaining a loan for a business acquisition is not automatic. Swiss banks apply strict criteria and examine each application carefully.
The difference between an accepted application and a rejected one? Preparation. A well-structured financing application demonstrates your seriousness, your management capacity and the viability of the project. It reassures the bank about its risk exposure.
This practical guide explains how to prepare a complete bank financing application. You will discover the essential documents, the real expectations of Swiss banks, and the strategies to adopt in case of rejection. Whether you have a substantial personal contribution or are considering an acquisition with little capital, this information will help you present your project in the best possible light.
📌 Summary (TL;DR)
Building a solid bank financing application requires gathering complete financial documents (balance sheets, profit and loss accounts, business plan), demonstrating a sufficient personal contribution (generally 20-30% of the price), and preparing a justified valuation of the target company. Banks assess your repayment capacity, your professional experience and the project's future profitability.
In case of rejection, alternatives exist: vendor credit, private investors, or improving the application for a new request. The key to success lies in meticulous preparation and professional presentation of your acquisition project.
📚 Table of contents
What banks assess above all
Swiss banks analyse each acquisition financing application according to three fundamental pillars.
First pillar: the viability of the target company. The bank examines historical financial results, profitability, competitive position and growth prospects. It verifies that the company generates sufficient cash flow to repay the credit.
Second pillar: your repayment capacity. Beyond the company, the bank assesses your personal financial situation, your current income, your assets and your existing commitments.
Third pillar: your acquirer profile. Your professional experience, your sector-specific skills and your credibility play a decisive role. Banks favour acquirers who know the business sector.
Key ratios analysed include the equity ratio (minimum 20-30%) and the self-financing capacity of the target company.
Personal contribution: how much is really needed?
In Switzerland, banks generally require a personal contribution of 20 to 30% of the acquisition price for an acquisition bank credit.
This contribution can take several forms: available cash, bank guarantees, pledging of assets (securities, real estate), or contribution in kind. Banks rarely accept a contribution below 20%, except in exceptional situations.
Certain sectors benefit from greater flexibility. A highly profitable company with a solid track record can sometimes justify a reduced contribution. Conversely, a cyclical or struggling business will require a larger safety cushion.
If your contribution is limited, alternative solutions exist. Vendor credit or earn-out can complement your bank financing and reduce the need for initial capital.
Essential financial documents
A complete credit application relies on rigorous financial documentation. Banks analyse two categories of documents: those relating to the target company and those concerning your personal situation.
The quality and completeness of these documents directly influence the bank's decision. An incomplete or imprecise application delays processing and reduces your chances of approval.
Prepare these documents in advance to accelerate the process. The more structured and transparent your application, the more confidence you inspire in your banking contact.
Documents relating to the target company
The bank requires balance sheets and profit and loss accounts for the last 3 to 5 years to assess the company's financial trajectory. These documents reveal profitability, balance sheet structure and turnover evolution.
The business plan with financial projections over 3 to 5 years is essential. It must demonstrate post-acquisition viability and your development strategy.
Add key contracts: main customers, strategic suppliers, commercial leases. The bank verifies the stability of commercial relationships.
A detailed list of assets and liabilities completes the picture. If available, financial due diligence considerably strengthens your application.
Explore businesses for acquisition on Leez to identify opportunities with already structured documentation.
Documents relating to the acquirer
Your bank will examine your bank statements for the last 3 to 6 months to verify your savings capacity and the source of your personal contribution.
Recent tax returns (last 2-3 years) attest to your income and your asset situation. They constitute official proof of your financial solidity.
Your detailed CV and professional background demonstrate your legitimacy to acquire the company. Highlight your sector experience and your managerial skills.
Certificates of assets (real estate, investments, holdings) complete the picture of your financial situation.
Finally, a detailed financing plan shows the intended use of funds: acquisition price, working capital, initial investments, ancillary costs. This transparency reassures the bank.
The business plan: your best ally
The business plan is the heart of your acquisition financing application. It demonstrates your understanding of the company and your strategic vision.
Your business plan must contain a clear acquisition strategy: how will you ensure continuity, develop the business, retain customers and employees?
Realistic financial projections over 3 to 5 years constitute the most scrutinised element. Include projected profit and loss account, cash flow plan and projected balance sheet. Avoid excessive optimism: the bank prefers conservative assumptions.
Detail the transition plan: support period by the seller, knowledge transfer, communication to stakeholders.
A market and competition analysis proves your knowledge of the sector. Identify risks (departure of key customers, supplier dependency) and present your mitigation measures.
Realism and consistency take precedence over excessive ambition.
Company valuation: a key element
The bank systematically verifies the consistency between the acquisition price and the real value of the company. An overvalued price increases the risk of rejection.
Common valuation methods include EBITDA multiples (depending on the sector), the discounted cash flow method (DCF) and asset value for asset-intensive companies.
A professional valuation adds credibility to your application and facilitates bank negotiations. It demonstrates that the price is based on objective criteria, not solely on negotiation between parties.
Use the Leez valuation tool to obtain an initial estimate. For a bank application, call upon an expert from the Leez partner network: fiduciaries and M&A experts can carry out a detailed and defensible valuation for the bank.
Preparing the bank interview
The bank interview is the decisive stage to obtain an acquisition loan. Your preparation makes the difference.
Master your application inside out. Know every figure, every assumption in your business plan. The bank will test your credibility by asking precise questions.
Anticipate difficult questions. Why this specific company? How will you manage the transition? What is your plan B if results disappoint in the first six months? Prepare factual and reassuring answers.
Demonstrate your legitimacy. Highlight your sector experience, your past successes, your professional network. The bank finances a person as much as a project.
Be transparent about risks. Identifying weaknesses and explaining how you will manage them inspires more confidence than minimising them. The bank appreciates realism.
What to do in case of bank rejection?
A bank rejection is not a dead end. Several alternatives allow financing a business acquisition without traditional commercial credit.
Before exploring these options, ask your bank for the precise reasons for rejection. This information will allow you to adjust your strategy: insufficient contribution, overly optimistic business plan, lack of sector experience?
Certain alternative financing solutions may even prove more suitable for your situation than classic bank credit.
Alternative financing solutions
Vendor credit allows staggering part of the payment to the seller. This solution reduces your initial bank financing need and demonstrates the seller's confidence in the company's viability.
Earn-out links part of the price to future performance. You pay according to actual results, which reduces risk and initial contribution.
Private investors or family offices can provide equity in exchange for a stake. This option dilutes your control but strengthens the financial structure.
Crowdlending mobilises several individual lenders via specialised platforms.
SME guarantee schemes (Cautionnement Romand, SAFFA) facilitate access to credit by guaranteeing part of the loan.
Consult our guide on acquisition without capital to explore these alternatives in depth.
Improving your application for a new request
If you wish to try your luck again with a bank, several levers exist.
Increase your personal contribution by mobilising assets, finding family co-investors, or saving for a few additional months.
Strengthen your business plan with more conservative assumptions, sensitivity analyses and detailed scenarios.
Target a smaller or more profitable company to reduce the amount to be financed or improve the risk profile.
Partner with a co-acquirer who brings complementary skills and strengthens the financial structure.
Call upon an M&A expert from the Leez network to professionally structure your application and maximise your chances.
A solid bank financing application rests on three pillars: a sufficient personal contribution (generally 20 to 30% of the price), complete and up-to-date financial documents, and a realistic business plan that demonstrates the project's viability. Swiss banks assess your repayment capacity, the quality of the target company and your credibility as an acquirer.
Meticulous preparation of each element makes the difference between rejection and approval. A professional company valuation strengthens your application and facilitates negotiations with banking institutions. In case of rejection, several alternatives exist: vendor credit, private investors or hybrid financing.
Are you looking for a company to acquire? Browse the opportunities available on Leez and build your acquisition project on solid foundations. For personalised support in financial structuring, our network of partner experts can guide you at every stage.
