Features Not cited in this sectionAny source. Please help improve this section by adding references to reliable sources. Passive materials may be questioned and deleted. （June 2020 ）（Understand how and when to delete this template message ） Leverage acquisitions become attractive because they usually represent a win-win situation for financial sponsors and banks: financial Initiators can use leverage to increase their shareholding rate; compared to the usual corporate loans
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Banks can obtain higher profits when supporting leveraged new database acquisition financing because the interest charged is much higher. Banks can increase the likelihood of repayment by obtaining collateral or guarantees. The amount of debt that banks are willing to provide to support leveraged acquisitions varies greatly and depends on the quality of the assets to be acquired, including their cash flow, history, growth prospects, and hard assets; the experience and equity provided by financial sponsors; and the overall economy surroundings.
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A debt amount of up to 100% of the purchase price has been provided to companies with very stable and BJB Directory guaranteed cash flow, such as a real estate investment portfolio secured by a long-term lease agreement to guarantee rental income. Usually, debt with a purchase price of 40-60% can be provided.