Debt is a little like alcohol – very powerful stuff, but deadly if used to excess.

During the first few years of this century business gorged itself on debt, and became heavily intoxicated with the stuff. Some companies suffered from acute debt poisoning and went bankrupt, or were sold or broken up. For many others, the past couple of years have been a drawn-out hangover, gradually recovering from an over-indulgence of borrowings. And now a great many businesses of all descriptions have to live a reformed, debt-free life – teetotallers from the demon credit.

In the new world of debt abstinence, where funding is scarce, the capital structure of deals being carried out has changed beyond recognition. I have found that while many major banks are pretending to be open to new customers, in truth they are shrinking their books and effectively extending no new lines. Hence, acquisitions my firm is considering are being financed with 50 per cent or even 100 per cent equity – transactions that three years ago would have needed just 25 per cent equity.