Compass Business Finance has released a white paper on finding and funding mergers and acquisitions.
The company said that whilst Covid-19 has been a serious threat to many businesses the pandemic has, through CBILS, enabled companies to restructure and stay alive, presenting an opportunity for like-minded business owners to talk about M&A possibilities. The Office for National Statistics reported a significant rise in M&A activity towards the end of 2020 with most commentators predicting that the next 6-12 months will be even busier.
“Access to finance for M&As is very attractive with low interest rates and the ability of banks, along with non-bank lenders, to provide CBILS as well as other favourable funding structures. This is certainly a moment in time,” said David Bunker, director of Compass Business Finance.
CBILS can provide support to M&A deals through a range of facilities, including loans, sale and hire purchase back, and invoice discounting. Compass pointed out that the Chancellor announced key measures within the Budget that will indirectly support M&A activity, including the new Recovery Loan Scheme (RLS), allowing businesses of any size to apply for up to £10m in funding and a combined group limit of £30m, subject to qualifying criteria. Qualification for RLS funding is not dependent on whether a business has previously benefitted from BBLS, CBILS or CLBILS.
The Super Deduction, represents an increased temporary tax relief on qualifying investments of 130% of the purchase value, further supporting post-completion M&A activity.