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 Ohio, as in other states, private equity (PE) financing is a common method for funding the acquisition or expansion of businesses. PE firms invest in companies that are not publicly traded, often with the goal of eventually selling the company at a profit. Leveraged buyouts (LBOs) are a specific type of PE transaction where the PE firm uses a significant amount of borrowed money to acquire a company. The debt that is incurred is then typically placed on the balance sheet of the company being acquired. Ohio does not have specific statutes that regulate the general practice of PE financing or LBOs. However, transactions must comply with federal regulations, such as securities laws enforced by the Securities and Exchange Commission (SEC), as well as state laws governing corporate governance, securities, and creditor rights. Additionally, the terms of the loans used in LBOs would be subject to Ohio's commercial transaction laws, and lenders must adhere to state usury laws, which limit the amount of interest that can be charged on loans.