Finance question
What documents do lenders need when I buy a business?
It depends on the deal, but lenders want two sets of papers: proof the business earns what the listing says, and proof you can carry the loan. For the business that means two to three years of financials and BAS, the lease and the contracts. For you it means ID, your assets and liabilities, and details of any property offered as security.
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The short answer
Most of the file is about the business you are buying
In an acquisition the lender is funding a business it has never seen trade, so the biggest part of the file is the target's paperwork rather than yours. Property-backed finance can settle with no financials on many deals, and that covers your own trading history. The lender will still want verified financials for the business you are buying, usually two to three years, plus a clear reason it will keep performing after the owner leaves. Send the pack together, because the lender needs the business's numbers before it can assess anything.
Across our guides the checklist is consistent. Cleaning, hair salon and landscaping purchases are sent in with two years of financials and BAS that match the listing, while plumbing, dental and allied health purchases are sent in with three years. Contracted businesses add a contract register showing term, notice period and an assignment clause, and lenders want no client over 15% of revenue (cleaning business guide). Add the lease, payroll by role, and a list of vehicles and equipment with any finance still owing.
The valuation is the document that sets the loan. Lenders size the loan off their own valuation, and the dental guide budgets $15,000 to $35,000 for a contract review, financial due diligence and an independent valuation if the lender wants one, plus $50,000 to $100,000 of working capital on a mid-sized practice (dental practice guide). Your side of the file is shorter: identification, a statement of your assets and liabilities, and for any property you offer as security, a recent rates notice and your current loan balance. Ventas is a broker across 40+ lenders, with no upfront fee to you; the lender pays us on settlement.
Do you qualify?
The papers that make up a typical acquisition file.
Financials and BAS
Two to three years for the business you are buying, matched to the listing.
Lease and contracts
The lease with years left and a register of signed contracts.
Staff and plant
Payroll by role, plus vehicles and equipment with any finance on them.
You and your security
ID, your assets and liabilities, and details of any property you offer.
Why a complete pack gets a better answer
Numbers that match
BAS and returns that reconcile to the listing build trust in the earnings.
Risks answered early
Lease term, contract transfer and staff are the first things a lender checks.
Fewer repeat requests
One complete pack avoids the back and forth that slows an assessment.
A worked example
A buyer agrees to pay $900,000 for a dental practice. The lender's valuation, built from three years of fees and profit, comes in at $850,000. At 80% of the valued price, inside the 70 to 100% typical of practice loans, it advances $680,000. The buyer covers the $220,000 difference, plus $15,000 to $35,000 of due diligence and valuation costs, from savings and home equity. Illustrative only.
Common questions
Frequently asked questions
How many years of financials do lenders ask for?
Usually two to three years for the business you are buying. Our guides show two years of financials and BAS for cleaning, salon and landscaping purchases, and three years for plumbing, dental and allied health.
Do I need my own financials as well?
Not always. Property-backed finance can settle with no financials on many deals, which covers your own trading history, but the lender still wants verified figures for the business you are buying.
Will the lender order its own valuation?
Often. The loan is sized off the lender's valuation rather than your contract price, so it may require an independent valuation. Budget for it alongside legal and accounting due diligence.
What if the seller will not share their financials?
Then a lender generally cannot assess the deal, and it is a warning sign about the business. Ask for the financials and BAS under a confidentiality agreement once you are serious, and ask your solicitor about making the contract conditional on finance and due diligence.