---
alternate_lang: de
date_added: '2026-07-23T06:31:21.769000+00:00'
date_modified: '2026-07-23T10:00:14.696580+00:00'
description: Anyone who accepts the interest barrier in a Leveraged Buyout (LBO) as
  an unavoidable fate is burning cash – and needlessly suppressing returns. 💸 In every
keywords:
- LinkedIn
lang: en
title: Anyone who accepts the interest barrier in a Leveraged Buyout (LBO) as an unavoidable
  fate is burning cash – an
type: article
url: http://leasing-pilot.com/en/news/anyone-who-accepts-the-interest-barrier-in-a-leveraged-buyout-lbo-as-an-unavoidable-fate-is-burning-cash-an/
---



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2. Anyone who accepts the interest barrier in a Leveraged Buyout (LBO) as an unavoidable fate is burning cash – an

# Anyone who accepts the interest barrier in a Leveraged Buyout (LBO) as an unavoidable fate is burning cash – an

Anyone who accepts the interest barrier in a Leveraged Buyout (LBO) as an unavoidable fate is burning cash – and needlessly suppressing returns. 💸 In every

![Anyone who accepts the interest barrier in a Leveraged Buyout (LBO) as an unavoidable fate is burning cash – an](/media/thumbs/news_image/linkedin-9b7bdff4db.webp.400x400_q85.webp)


Anyone who accepts the interest barrier in a Leveraged Buyout (LBO) as an unavoidable fate is burning cash – and needlessly suppressing returns. 💸  
  
Every structure memo includes this step: after closing, a tax consolidation group (fiscal unity) is established between AcquiCo and the target to offset operating income against the interest burden.  
  
Yet in larger deals, a massive cash leak often persists in practice:  
  
❌ Net interest expense is generally only deductible up to 30% of tax-adjusted EBITDA.  
❌ The interest carryforward provides no benefit in an LBO – because the necessary deleveraging rarely takes place.  
❌ Result: A significant portion of interest expense remains unrecognized for tax purposes.  
  
It's remarkable how often this situation is simply accepted as permanent. Yet there is a highly efficient lever that is used far too rarely: leasing.  
  
💡 The key advantage: lease expenses are not subject to the interest barrier!  
  
How to use leasing as a return booster:  
🔹 Capex: Lease new equipment directly instead of debt-financing it.  
🔹 Digitalization: Structure software & IT projects as leases as well.  
🔹 Sale-and-leaseback: Refinance already acquired assets.  
  
The result:  
The group's interest expense relevant to the interest barrier decreases,  
the tax burden shrinks,  
👉 cash flow increases!  
  
At #LeasingPilot, we understand these structural levers and support you in implementing them efficiently.  
  
👉 Does your company have investments coming up in the near future?  
  
👉 Have you already discussed this relief potential with your tax advisor?  
  
Don't leave your effective tax rate to chance.  
Let's talk!  
  
#PrivateEquity #LBO #CFO #Treasury

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