Loan to buy out a business partner
Funding for one director or shareholder to buy out another. Common in long-running family businesses or agency partnerships where one principal exits.
Who needs this
Established UK Ltd companies with multiple directors / shareholders where one is exiting. The remaining principal needs funding to acquire the exiting share. Tax planning matters materially (entrepreneur's relief / BADR for the exiter, structuring for the acquirer).
Products that fit
- Term loans secured against company assets
- Asset-backed lending where company has hard assets
- Bespoke commercial finance for £500k+ deals
Top UK lenders
- OakNorth for bespoke £500k+
- Allica Bank for asset-backed
- Specialist commercial brokers for complex structures
Watch outs
- Tax structuring is material; involve an accountant early.
- Lender will want to see post-buyout governance and the remaining director's capability.
- Outgoing partner's PG release needs to be documented.
Alternatives worth considering
- Vendor loan from the exiting partner (paid over 3-5 years)
- Phased buy-out via earn-out structure
- External equity if debt is not the right answer
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Open our /get-quotes/ form →Last reviewed: 2026-04-26.