Private equity (PE) financing is money invested by PE firms in privately owned businesses. PE financing is often used to buy out some or all of the ownership interests of the owners of a business (target company). PE firms often use debt to finance these buyout transactions—with the target company taking on significant loans to secure the money (capital) to buy out the current owners of the business. The target company must, of course, pay back these loans from its lenders, with interest. Because of this use of debt financing, these buyouts have traditionally been called leveraged buyouts (LBOs).

In Florida, private equity (PE) financing operates under both federal securities laws and state regulations. PE firms typically invest in privately held companies, often through leveraged buyouts (LBOs), where the acquisition is financed significantly through debt. The target company assumes this debt, which it is responsible for repaying with interest. Florida does not have specific statutes that uniquely govern PE firms or LBOs, but these transactions are subject to general corporate laws found in the Florida Business Corporation Act, as well as federal regulations such as the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws regulate the offer and sale of securities, require disclosures for investor protection, and govern the behavior of all parties involved in securities transactions. Additionally, PE firms must comply with regulations from the Securities and Exchange Commission (SEC), including registration requirements or exemptions under the Investment Advisers Act of 1940 if they provide investment advice. It is advisable for PE firms and target companies to consult with an attorney to ensure compliance with all relevant laws and regulations when engaging in LBOs and other financing transactions.