ROADNIGHT MUSING – APRIL 2026
THE SILVER TSUNAMI: WHO IS FUNDING AUSTRALIA'S GENERATIONAL CHANGING OF THE GUARD?
Australia is heading into the largest generational transfer of business ownership in its history. More than one in five small business owners are now over 60, according to the ASBFEO, and MYOB's Business Monitor shows 48% of SME owners aged 60 and over plan to exit within five years. The question is not whether these businesses will change hands. It is whether the funding will be there when they do.
Too often, these transitions stall due to differences in opinion over the buy-sell spread, and secondly securing a commercially pragmatic funding solution. A business that took 25 years to build starts to drift while the deal sits in a bank's credit queue.
THE REAL BOTTLENECK IS NOT THE PLAN. IT IS THE CHEQUE.
Only 24% of retiring owners have a succession plan in place. That number gets a lot of airtime, but the plan is the easy part. You can sketch one on the back of a napkin. Making it happen is where things break down, and it almost always comes back to money.
The pattern is predictable:
Founder wants to retire.
Buyer lines up. They agree on terms.
Buyer goes to the bank. Bank asks for property security.
Buyer does not have a $10m property portfolio sitting around.
The business throws off strong cashflow, but the bank's credit model was built for mortgages, not cashflow deals. Even when a bank does engage, it takes months or in some cases, may not be interested in a transaction size less than $20m. A founder who is mentally on the golf course does not have months..
HOW WE LOOK AT THESE DEALS DIFFERENTLY
Acquisition finance is core to what we do at Roadnight Capital. We are not trying to fit these transactions into a mortgage lending model. Our focus is on ascertaining the sustainable debt load of the business based on its free cashflow generating capacity under both status quo and stressed scenarios. That means we underwrite the business:
How resilient are the cashflows?
How concentrated is the customer base?
What do the margins look like across a cycle?
Is there a credible transition plan so the business does not lose its key relationships the day the founder walks out?
Those are the things that determine whether a deal works.
Structurally, the transaction can be designed to provide more leverage in the first 24 months while the new owner establishes themselves, with free cashflow shared between the owner and lender once comfortable Debt/EBITDA levels are reached. A business throwing off consistent free cashflow can usually support enough acquisition debt for the buyer to get in with a sensible equity contribution. The key is matching the facility to how the business actually generates cash.
And we can move. When a founder and buyer have shaken hands, the last thing anyone needs is a lender disappearing into committee for three months.
DE-RISKING THE TRANSITION
A well-structured handover period is one of the most effective ways to protect both the buyer and the lender. Typically, this involves the outgoing owner remaining in the business for a minimum of three months, and up to 12 months on a consulting basis, to transfer relationships, operational knowledge and institutional memory.
For the buyer, developing a detailed integration plan can be pivotal. Beyond the funding, getting the right support around the new owner matters. Roadnight Capital can connect buyers with experienced independent operators across strategy, finance and governance to help them hit the ground running.
WHAT THIS LOOKED LIKE WITH B&B FOODPAK
B&B Foodpak has been around for over 20years, supplying spare and consumable machine parts to food processors, corrugated board manufacturers and recyclers across Australia and New Zealand. It is the largest independent supplier of these products in Australia and New Zealand, characterised by strong diverse supplier relationships and a diverse sticky customer base. It is the kind of business that does not show up on your radar until you need it.
The ownership transition needed a lender willing to back the business on its fundamentals rather than defaulting to "show me the bricks and mortar." Someone who could assess operating quality, structure a facility that gave the buyer room to run it, and do it on a timeline that kept the deal alive.
“Roadnight were truly our knights in shining armour. We met a lot of capital providers and were close to completing the deal with a different private credit lender who had said all the right things throughout diligence and had even asked us to go exclusive with them – only for them to pull out very late in the process. It was a disaster, until we picked up the phone to Roadnight.
Allan and the team moved quickly to understand B&B Foodpak, who we were as future owner/operators and our investment thesis. The team then worked with us at speed to reach acceptable terms and pricing.
Roadnight worked collaboratively with us when the inevitable late stage curve balls in diligence or in docs with the vendor arose. The team were able to quickly assess risk and balance the commercial aspects of the transaction and our debt terms to get to the right outcome.
Unlike the other lenders and private credit funds we spoke with, we were working with the key decision makers and influencers at the fund, as such we had confidence we could rely on what they represented.
I would recommend anyone considering an acquisition of this nature to give the team at Roadnight a call.”
Sam Morris – Managing Director and Owner, B&B Foodpak
Clean handover. Customers, suppliers, staff carried straight through. That is what a well-structured deal looks like.
THIS WAVE IS JUST GETTING STARTED
The demographic pressure is intensifying. The ATO is tightening its focus on succession arrangements and fewer than 30% of family businesses make it to the second generation. That is not improving unless the funding side gets better.
For buyers, the pipeline is unusual. Profitable, established businesses with decades of customer relationships are coming to market because the owner has run out of road. These are not distressed situations. They are good businesses looking for new custodians. But the opportunity only converts into a transaction when someone can fund it.
LET US TALK
If you are working through a succession or advising someone who is, we are always happy to have a confidential conversation about how the funding might work. No pitch deck. Just a straight conversation about what is possible.
Get in touch with Roadnight Capital.