Whether you are acquiring a business, refinancing existing facilities, or simply trying to understand how to fund your next stage of growth, two disciplines sit at the centre of every successful outcome: acquisition finance and debt advisory. For Australian businesses navigating today’s complex credit environment, understanding how these work together — and when to seek independent advice — can be the difference between a transaction that closes on optimal terms and one that doesn’t close at all.
What Is Debt Advisory?
Debt advisory is the independent advice provided to borrowers — businesses, sponsors and owners — on how to structure, source and negotiate debt financing. Unlike a bank or lender, a debt advisor acts exclusively on behalf of the borrower, with no product to sell and no balance sheet to deploy.
A corporate debt advisor helps businesses with:
- Assessing the right quantum and structure of debt for the business’s risk profile and strategy
- Identifying the most appropriate lenders across bank and non-bank markets
- Preparing information memoranda and financial models to present the credit compellingly
- Running a competitive process to secure the best available terms
- Negotiating facility agreements, covenants and security structures
- Advising on capital structure — the optimal balance of debt and equity
The value of independent debt advisory lies in market knowledge, lender relationships and negotiating leverage. A well-run debt advisory process consistently delivers better pricing, more flexible terms and broader optionality than a direct-to-lender approach.
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Why independent advice matters When a business approaches its bank directly, it receives one offer from one lender. An independent debt advisor runs a competitive process across multiple lenders — creating genuine tension that drives better outcomes for the borrower on price, structure and flexibility. |
What Is Acquisition Finance?
Acquisition finance refers to the debt funding used to support the purchase of a business, asset or portfolio. It is one of the most common and complex forms of corporate debt, requiring careful structuring to reflect the specific characteristics of the target, the buyer’s balance sheet and the post-acquisition business plan.
In the Australian market, acquisition finance typically takes one or more of the following forms:
|
Facility Type |
What it funds |
|
Senior Secured Debt |
The primary acquisition facility, secured over the assets and cash flows of the target. Typically provided by major banks or non-bank lenders. |
|
Unitranche Debt |
A single blended facility combining senior and subordinated debt. Common in private equity transactions and mid-market deals. Provided by private credit funds. |
|
Mezzanine Finance |
Subordinated debt sitting below senior facilities in the capital structure. Higher cost but less dilutive than equity. Often used to bridge valuation gaps. |
|
Vendor Finance |
A portion of the purchase price deferred and owed to the vendor. Effectively subordinated debt. Common in SME and owner-operated business acquisitions. |
|
Working Capital Facilities |
Revolving credit facilities to fund post-acquisition working capital needs and integration costs. |
How Debt Advisory and Acquisition Finance Work Together
Acquisition finance is one of the most complex areas in which debt advisory adds the most value. The stakes are high, the timelines are compressed, and lenders price uncertainty into their terms. An independent debt advisor navigates all of this on behalf of the acquirer.
Before the Transaction
A debt advisor begins work well before a deal is signed. Early engagement allows the advisor to:
- Assess the target’s credit profile and indicative lending appetite across the market
- Structure the acquisition to maximise debt capacity and minimise equity requirement
- Prepare the business for lender due diligence — financial models, information memoranda, management presentations
- Provide an independent view on achievable leverage, pricing and terms before the buyer commits to a price
During the Transaction
Once a deal is in exclusivity or under offer, speed and certainty become paramount. A debt advisor:
- Runs a parallel process across multiple lenders to maintain competitive tension
- Manages lender due diligence, Q&A and credit processes to minimise delays
- Negotiates term sheets and facility agreements to protect the borrower’s interests
- Coordinates with legal, financial and tax advisors to ensure alignment across workstreams
After Settlement
Post-acquisition, the debt advisor’s role often continues:
- Monitoring covenant compliance and providing early warning of headroom erosion
- Advising on refinancing as the business grows beyond the initial facility
- Supporting follow-on acquisitions as the platform executes its growth strategy
The Australian Acquisition Finance Market in 2026
The Australian acquisition finance market has evolved significantly over the past decade. The traditional dominance of the major banks has been supplemented — and in some segments displaced — by a rapidly growing private credit market.
For mid-market businesses (typically $10 million to $500 million in enterprise value), private credit funds now offer a genuine and often superior alternative to bank debt, particularly for:
- Transactions with complex structures or higher leverage requirements
- Businesses in sectors outside traditional bank lending appetite
- Deals requiring speed and certainty of execution
- Situations where covenant flexibility and relationship continuity are valued over price alone
Against a backdrop of elevated interest rates and tighter bank credit conditions in 2026, understanding the full landscape of available capital — bank and non-bank — is more important than ever. An independent debt advisor provides access to both markets simultaneously.
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Private credit in Australia Private credit AUM in Australia has grown substantially, with specialist managers offering unitranche and mezzanine solutions across a broad range of transaction sizes and sectors. For many mid-market acquirers, private credit provides execution certainty and structural flexibility that bank facilities cannot match. |
When Should You Engage a Debt Advisor?
The earlier, the better. Many businesses engage a debt advisor only after a deal has been struck and lender terms have already been set — at which point the advisor’s ability to improve outcomes is constrained. Early engagement, ideally before exclusivity, allows the full value of the advisory process to be realised.
Consider engaging an independent debt advisor when:
- You are planning an acquisition, merger or management buyout
- Your existing facilities are approaching maturity or covenant headroom is tightening
- You are considering a material capital expenditure program requiring new debt
- Your business has grown and your current capital structure no longer reflects your risk profile or aspirations
- You want an independent view on whether your existing lender is providing competitive terms
How AbCap Can Help
At Aberdeen Capital Debt Advisory, we specialise in providing independent debt advisory to corporate clients across Australia. Our team brings deep experience across acquisition finance, refinancing, capital structure advisory and working capital solutions — with an extensive network across major bank and non-bank lenders.
Our acquisition finance advisory services include:
- Debt capacity assessment: Pre-acquisition debt capacity and structuring analysis
- Transaction preparation: Preparation of information memoranda, financial models and lender presentations
- Lender process management: Competitive lender processes across bank and private credit markets
- Negotiation: Term sheet and facility agreement negotiation
- Ongoing advisory: Post-acquisition covenant monitoring and refinancing advisory
Whether you are a first-time acquirer or an experienced corporate buyer, AbCap provides the independent advice, market access and execution capability to achieve the best available outcome for your transaction.
