Private Equity

How private equity works

The investment agreement determines valuation, control, governance, investor rights and the intended route to an eventual return. A transaction can combine equity with debt, but the two create different obligations.

Practical UK business example

A company considering expansion compares a loan with an investor’s proposal to acquire an ownership stake and participate in strategic decisions.

Illustrative example only; not a finance quotation or a client case study.

Why it matters

Equity can provide growth capital without the same contractual repayment profile as a straightforward loan, but dilutes existing owners and can change control.

Limitations and common misconceptions

It is not a grant, and investors normally expect a financial return and an eventual exit. Sorbus service links are educational context, not a claim that every equity transaction is arranged through the brokerage.

Discuss business borrowing to discuss how the structure relates to your business.