Should You Use Debt to Buy Out a Partner?

Business partnerships don’t always last forever. Whether due to retirement, misalignment, or differing visions for growth, there often comes a time when one partner wants to exit—and the other needs to decide how to finance the buyout.

For many owners, using debt is the most strategic and least disruptive way to retain control without giving up equity or draining working capital. At Olympic M&A, our Growth Capital Services help business owners structure and fund partner buyouts with confidence, using capital sources that protect both short- and long-term value.

Why Owners Turn to Debt for Partner Buyouts

Buying out a partner is not just a legal or emotional decision—it’s a financial one. A well-structured capital raise can:

Allow for 100% ownership without using personal savings
Prevent the need to bring in an outside investor too early
Improve decision-making agility and streamline operations
Preserve valuation in advance of a future sale

When a Partner Buyout Makes Strategic Sense

Partner transitions happen for a number of reasons:

Retirement or personal exit
Differing risk tolerance or business direction
Uneven time or capital contributions
Ownership imbalance after years of growth

Regardless of the trigger, financing the buyout with outside capital—rather than internal cash flow—can help maintain business momentum during the transition.

Financing Options for a Partner Buyout

Cash Flow Lending

For companies with solid EBITDA and financial reporting, cash flow lenders can provide term loans based on earnings, often without collateral. These are ideal for businesses with predictable cash generation.

Mezzanine Financing

Mezzanine debt sits between senior debt and equity. It’s flexible, often interest-only for the first year, and allows you to buy out your partner without giving up control.

Private Credit

Non-bank lenders, including family offices and private credit funds, offer customized capital solutions with fewer restrictions and faster execution. These options are ideal for time-sensitive or complex buyouts.

Seller Note or Hybrid Deal

If your partner is open to a structured exit, a seller note—with interest and a scheduled repayment—can be combined with outside capital for a more balanced approach.

How Olympic M&A Helps

As your capital and M&A advisor, Olympic M&A helps you:

Determine the fair business valuation
Select the right financing strategy for the buyout
Introduce capital partners across cash flow lending, mezzanine financing, and private credit
Structure the transaction to minimize disruption and maximize future optionality

We help owners navigate buyouts in a way that preserves operational stability—and keeps your long-term goals in focus.

Take Control Today. Build Value for Tomorrow.

Partner transitions don’t need to drain your reserves or force a premature equity raise. With the right financing strategy, you can retain control, protect your team, and position your business for a future sale at maximum value.

Olympic M&A helps business owners navigate both ownership transitions and full exit strategies—with the capital and structure to support each step of the journey.

Tony Siebel
Managing Director
📞 502.360.8320 ✉️ tonys@olympicma.com
🌐www.olympicma.com

About The Author

Tony Siebel is the Managing Director of Olympic M&A, a Louisville-based advisory firm
specializing in healthcare and high-value service businesses. With more than seven
years of experience in psychiatry, behavioral health, physician practices, and recurring
service industries, he has built a reputation for helping founders capture the full value of
their life’s work.
Through Olympic M&A, Tony connects owners with private equity groups, family offices,
and strategic buyers nationwide. His hands-on, data-driven approach ensures owners
maximize value while protecting their legacy during the most important transaction of
their lives.

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