Am I Ready to Buy an FM Business? | What Lenders Look For

Assess Your Position

Answer these questions honestly. Your score helps us understand your position and match you with the right advice. Nothing is shared until you choose to get in touch.

Your personal profile

Industry experience

Do you currently work in facilities management or a related sector? Lenders strongly prefer buyers who understand the sector they are buying into. FM operations experience, an IWFM qualification, or sector management experience all count.

If you lack direct FM experience, lenders may require a larger deposit or expect you to retain the existing management team during a transition period. Partnering with someone who has sector knowledge, or retaining key account managers post-acquisition, can strengthen your application.

Management experience

Have you managed a team, run a P&L, or operated a business before? Even if you have always been employed, lenders want evidence you can run a business, not just do the operational work.

Lenders need confidence you can run the business, not just do the work. Consider whether your current role involves any P&L responsibility, team management, or strategic decision-making. Even informal experience counts.

Credit profile

Is your personal credit clean? No late payments in the last 12 months, no CCJs, no high levels of existing debt?

Check your credit report now. Late payments, CCJs, or high existing debt will slow your application. Give yourself at least three months to resolve any issues before approaching lenders.

Deposit position

Do you have at least 20% of the expected purchase price available as a deposit? The sweet spot is 25 to 30%.

The minimum realistic deposit is 20%. Below this, most lenders will not engage. Start saving or explore whether you can raise equity from other sources. Some structures allow vendor loan-back as part of the deposit, which a specialist broker can advise on.

Personal guarantees

Are you prepared to provide personal guarantees for the acquisition loan? This is standard for SME acquisitions.

Personal guarantees are standard for SME acquisition loans. If you are not comfortable with this, acquisition finance may not be the right route. Discuss the extent of guarantee exposure with a broker before committing.

The target business profile

Recurring revenue

Does the target business generate 60% or more of its revenue from multi-year contracts or recurring service agreements? TFM contracts running three to five years, single-service FM contracts of 12 to 36 months, and TUPE obligations that create switching barriers all count.

This is the single biggest factor lenders assess. FM businesses with strong contract bases often have two to three years of forward revenue visibility, which is exactly what lenders want to see. If the target has low recurring revenue, it is still possible to fund, but expect stricter terms and a larger deposit requirement.

Contract base quality

Is the contract book well documented, with a healthy number of sites, reasonable average contract length, strong remaining terms, and sector diversity across healthcare, education, commercial, and public sector clients?

Ask for the contract book details: number of sites, average contract length, remaining term, sector diversity, and the size of the TUPE workforce per contract. A strong contract base with no single client dominating revenue is the foundation of most FM acquisition finance deals.

Certifications and accreditations

Does the business hold ISO 9001 (Quality), ISO 14001 (Environmental), and ISO 45001 (Health and Safety)? Beyond that: IWFM membership, BICS certification for cleaning operations, SIA licences for security, Living Wage Foundation accreditation, and DBS clearance across the workforce?

The ISO triple standard (9001, 14001, 45001) is increasingly a minimum requirement for public sector tenders. Missing certifications are not fatal, but they reduce the business's attractiveness to lenders and limit growth into higher-value contract opportunities.

Workforce stability

Are staff TUPE-protected, DBS-cleared, and stable? What are staff turnover rates in cleaning operations, and are key account managers likely to stay post-acquisition?

TUPE-protected staff transfer with the contracts, which guarantees service continuity. High staff turnover in cleaning operations is a common concern for lenders. Check key account manager retention rates, DBS clearance status, and whether any restrictive covenants are in place.

Asset base

Does the business have a meaningful tangible asset base, including cleaning and maintenance equipment, a vehicle fleet, CAFM software and systems, supply chain agreements, and uniform or PPE stock?

Equipment, vehicles, CAFM systems, and established supply chain agreements can all serve as security for asset-based lending. Get an independent valuation of tangible assets before negotiating. A strong asset base can improve your loan-to-value ratio.

Clean financials

Does the target business have at least three years of filed accounts with consistent or growing revenue, no HMRC arrears, and clean VAT returns?

Three years of filed accounts is the minimum. If the target has messy books, HMRC arrears, or declining revenue without explanation, either factor in the cost of fixing this or walk away. Due diligence will surface these issues.

Transferable goodwill

Does the business's reputation belong to the brand and team, or is it entirely dependent on the current owner personally?

If the business depends entirely on the owner's personal relationships, the value drops when they leave. Look for branded rather than personal goodwill: a strong company name, long-term contracts, established CAFM systems, and a team that clients know and trust.

Am I Ready to Buy a Facilities Management Business?