Finance question
Can I finance the stock and equipment when I buy a business?
Often yes, but the two behave differently. Equipment that comes with the business can be financed against the assets themselves, usually on better terms than goodwill. Stock is working capital, so it is funded separately and not spread over a five-year equipment term. Splitting stock, plant and goodwill in the contract is what lowers the cost of the deal, subject to lender assessment.
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The short answer
Three assets, three kinds of finance
A business sale usually bundles three different things into one price: the equipment, the stock and the goodwill. Lenders treat them differently, so a contract that splits the price between them usually costs less to fund. Equipment has a second-hand market, so it can be financed against its own value with the asset as security. Goodwill has nothing to repossess, so it needs a deposit or property behind it. Stock behaves like working capital, not like a five-year loan.
The guides show how this plays out by trade. A 4x4 workshop on Brisbane's northside was listed at $380,000 plus stock of circa $30,000, with the hoists and diagnostic gear funding as asset finance against their own value and the goodwill funding as business acquisition (mechanic workshop guide). In hair salons the plant is folded into the headline price and stock is added at valuation on settlement, typically adding $5,000 to $25,000 (hair salon guide). Hospitality is the caution: standalone ovens, fridges and coffee machines finance cleanly, but a custom fit-out has weak resale value, so lenders ask for a deposit, a shorter term or asset-backing (cafes and restaurants guide).
For the equipment portion a lender wants an itemised asset schedule, with age, condition and a value against each item. It will value used gear at what a valuer would give it, which the salon guide notes is often well under the seller's number, so ask for the schedule early and check it against the price. Equipment finance runs up to $500,000, often low-doc or no-doc, with approvals commonly back in 24 to 48 hours, so this part rarely holds up settlement. Ventas is a broker across 40+ lenders, not a single bank, and there is no upfront fee to you; the lender pays us on settlement.
Do you qualify?
What a lender looks at on the equipment and stock side of a purchase.
An asset schedule
Each item listed with its age, condition and a value, not one lump sum.
A deposit or equity
The goodwill portion needs cash or property behind it.
The contract split
Price divided between plant, stock and goodwill before you sign.
Trade experience
Lenders back buyers who know the trade the equipment serves.
Why splitting the price helps
Gear secures itself
Hoists, ovens and vehicles hold resale value, so they fund against themselves.
Goodwill stays smaller
Less of the price rides on the part with nothing to repossess.
Stock stays flexible
Funded as working capital, so it is not locked into a long term.
A worked example
A buyer is offered a Brisbane northside 4x4 workshop at $380,000 plus stock of circa $30,000, so $410,000 at settlement. Suppose the contract values the hoists and diagnostic gear at $90,000. That equipment is financed against itself, the $30,000 of stock is paid from working capital, and the remaining $290,000 of goodwill is funded with a deposit or equity in property. Illustrative only.
Common questions
Frequently asked questions
Can I finance the equipment that comes with a business?
Yes, often. Plant and vehicles are financed against the assets themselves, with approvals commonly back in 24 to 48 hours. Lenders usually value used gear at what a valuer would give it, which can be below the seller's figure.
Can I finance the stock too?
Stock is treated as working capital rather than equipment, so it is usually funded separately, through a stock facility or your own cash, and not stretched over a five-year equipment term. It is paid on settlement day, so plan the cash for it.
What does plus stock at valuation mean?
The price excludes stock. Parts, colour, product or goods are counted at settlement and you pay for them on top. In the salon guide that typically adds $5,000 to $25,000, and one Brisbane workshop listing put it at circa $30,000.
Does splitting the price change the GST on the sale?
It can. A sale of a going concern may be GST-free when the ATO conditions are met, and how the price is split can affect that. Ask your accountant before the contract is signed.