Can I use the target company's own cash and assets to help pay off the loan I used to buy it?

This is a common way acquisition financing is actually structured, sometimes described as leveraging the target's own balance sheet, but it needs to be built into the deal deliberately from the start rather than improvised informally afterward. Lenders financing a business purchase often structure the loan specifically so the target itself ends up providing security, or is amalgamated with the buyer's acquisition vehicle after closing, so the combined entity's own assets and cash flow support the debt going forward, rather than the buyer simply drawing cash out of the target on an ad hoc basis.

Directors of the target corporation continue to owe duties to that corporation itself even after an acquisition, so decisions about using its cash and assets to support the buyer's own debt need to be handled properly through the corporate structure, not treated as a simple transfer of funds. Because this involves both financing and corporate structuring considerations that are easiest to address before closing, a buyer planning this approach should raise it with the lender and structure it correctly from the outset.