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 Utah, 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. The use of debt in these transactions is significant, and the acquired company (target company) is typically responsible for the repayment of this debt. The legal framework governing these transactions includes state statutes that regulate securities, business transactions, and lending practices, as well as federal laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934, which govern the offering and sale of securities. Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act imposes certain regulations on PE firms. It's important for companies involved in PE financing to comply with these regulations and to structure their transactions in a way that aligns with both state and federal law. Companies considering PE financing or leveraged buyouts may benefit from consulting with an attorney to navigate the complex legal landscape.