Acquisition debt is repaid by the target's own cash generation. Sizing it against the buyer's balance sheet, or against a base case that assumes everything goes to plan, is how buy-outs get into trouble in year two.
Model the downside first
The question is not what the business can service if the plan is met. It is what it can service if revenue falls short and working capital moves against you.
Structure follows headroom
Senior debt, mezzanine and vendor components each sit at different points on the risk curve. The structure that closes the gap cheaply is not always the one that leaves the business room to operate after closing.
Run the lender process in parallel
Committed financing has to be available when the purchase agreement is signed, which means the lender process runs alongside the transaction rather than after it.