When Banks Say No: Private Credit for Acquisitions, Refinancing and Special Situations
A rejected bank proposal is useful information. Before seeking private credit, establish whether the problem is eligibility, leverage, security, timing or the underlying ability to repay. A new provider does not automatically solve a weak transaction.
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Avoid an outdated assumption about acquisitions
It is no longer accurate to say that Indian banks categorically cannot finance acquisitions. RBI’s current commercial-bank credit directions contain a specific acquisition-finance framework with eligibility, contribution, leverage and other conditions. The existence of that framework does not make every buyer or acquisition eligible.
Ask the bank to identify the applicable provision and its own credit requirements. Private credit may still be relevant where a lawful structure and investor mandate fit the transaction better.
Acquisition: test the combined business
Model integration costs, duplicated expenditure and working capital after closing. Treat projected synergies as assumptions requiring evidence. Confirm which entity owes the debt and whether cash can lawfully move from the operating business to that entity.
An acquisition can increase reported earnings while reducing near-term cash because the purchase price and integration payments precede the benefits.
Refinancing: calculate the actual exit amount
Obtain a dated payoff statement, release requirements and any prepayment costs from the existing lender. Coordinate security releases and new funding. A sanction amount equal to the old principal may be insufficient after accrued interest, expenses and reserves.
Compare the full new repayment schedule with the old one. A later maturity is helpful only if the business has a more credible repayment route by then.
Special situations: define the event
Identify the event expected to unlock cash, such as a documented sale or completion milestone. Assess what happens if it is delayed, reduced or cancelled. Have specialists examine existing defaults, litigation and creditor restrictions before committing.
Present the provider with a sources-and-uses statement, monthly downside model and legal structure. If the proposal relies primarily on another future refinancing, make that dependence explicit and test an alternative exit.
Connect with Monei Matters
Bring your acquisition or refinancing cash-flow plan to Monei Matters for a structured funding discussion.
Monei Matters
B-9, Near City Centre Market, Ramprastha, Ghaziabad, Uttar Pradesh 201011
Phone: +91 93138 03227 / +91 93110 03227
Website: www.moneimatters.com
Services include business finance, working capital, commercial mortgage/LAP, lease rental discounting, debt syndication, restructuring, settlements, FDI advisory and equity syndication.
Disclaimer
General information based on sources reviewed for the position as at 10 September 2026; not transaction-specific legal, tax or investment advice. Illustrations are hypothetical. Applicable law, documents and lender or investor terms govern each case; funding and settlement outcomes are not guaranteed.
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