Finance to buy a business
Buying a business, buying into one, or buying out a departing partner are all fundable. What changes is how much of the purchase price a lender will cover, and that depends far more on what you are buying than on the headline price.
Lenders treat these very differently. Where the purchase is mostly tangible assets, plant, vehicles, stock, the assets themselves can secure much of the facility.
Where you are largely buying goodwill, a customer list or recurring revenue, there is nothing to repossess, so lenders look for other security. In practice that usually means property.
Where property is available as security, expect 6% to 9% p.a. and a materially larger facility. Without it, expect 9% to 13% p.a. and a smaller, shorter facility. Those are indicative ranges for business finance, subject to credit approval.
Most acquisitions end up as a blend: the assets fund part, vendor terms cover part, and property or cash covers the rest.
Verified financials for the business you are buying, usually two to three years. A clear reason the business will keep performing after the current owner leaves. Relevant experience on your side.
A handover period with the vendor helps considerably, particularly where the relationships or the licences sit with them personally.
Buying out a co-owner is fundable and common in succession planning. The business already has a trading history, which usually makes it a cleaner application than an outside acquisition.
Where the business owns its premises, releasing equity from that property is normally the cheapest way to fund the buyout.
Can I buy a business with no deposit?
Rarely on goodwill alone. With property security or a substantial tangible asset base in the purchase, the required contribution drops a long way.
Does the business I am buying need to be profitable?
It needs to be demonstrably able to service the debt. A turnaround is fundable, but usually only against property rather than the business itself.
Can I fund a partner buyout?
Yes, and it is often easier than an outside purchase because the trading history and your role in it are already established.
Tell us what you are funding and we will benchmark it across the panel. Call 0412 833 197 or request a quote.