Finance question
Can I get finance to buy a security business?
Often yes for alarm, CCTV and monitoring businesses, less often for pure guarding. Lenders want recurring income, contracts that transfer to you, two to three years of financials and a licence path, and the gap is usually met with your own cash or property. Live listings show alarm and CCTV installers mostly asking $249,000 to $699,000, subject to lender assessment.
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The short answer
Lenders fund the monthly fee, not the labour hire
Security is three businesses under one name. Guarding and patrol firms sell labour by the hour, installers sell equipment and labour, and monitoring books sell a monthly fee that carries on after the sale. Lenders treat them very differently. A guard firm owns few assets, runs on thin margins and a high wage bill, and often holds short contracts, so some lenders decline a pure guarding purchase outright. An alarm, CCTV and monitoring business is easier to fund because the monitoring lines are steady income and the vans and installation gear can be financed against themselves.
The price range gives you the scale of the deal. Our security business guide surveyed nine live listings: alarm and CCTV installers mostly ask $249,000 to $699,000, a licensed company that has never traded asks $80,000, and a Melbourne rental and monitoring business with over 95 per cent recurring income asks $2.5 million. Where profit is shown, the three listings imply 3.1 to 4.6 times profit, by the guide's own arithmetic. A lender prices the same things a buyer should: how much of the income repeats, how long the contracts run, and whether they can be assigned to you.
The licence is a funding issue as well as a legal one. Each state licenses security businesses, and you and any key staff must meet the criteria. If the licence does not transfer, the contracts may not be able to continue, which is why settlement should be conditional on the licence outcome. 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 a security business purchase.
Recurring income
Monitoring lines or contracts with years left that can be assigned to you.
Two to three years of figures
Financials that reconcile to lodged BAS and bank statements.
A licence path
Evidence that you and key staff can be licensed in that state.
Industry experience
Time as a supervisor, technician or manager helps a first-time owner.
Why the structure matters more than the price
Vans and gear stand alone
Vehicles and installation equipment can sit on their own asset finance.
Property closes the gap
Equity in your home or another property can fund the rest of goodwill.
Contracts set the risk
A client on 40 per cent of revenue is something a lender will price in.
A worked example
A buyer takes an alarm and CCTV business listed at $699,000. Add $13,000 for legal, due diligence and licence costs and $60,000 of working capital, and the cash needed is $772,000 before transfer duty. A business acquisition loan covers $250,000 and equipment finance on the vans and gear covers $90,000. The remaining $432,000 comes from savings or a loan secured on property. Illustrative only.
Common questions
Frequently asked questions
Will a lender finance a security guarding business?
Sometimes, but it is the harder end. Guarding has thin margins, a high wage bill and little security to take, so some lenders decline it. Expect to put in more of your own money or property. Approval depends on lender assessment.
Do I need a licence before I can buy?
You need to be able to hold the right licence in that state, and key staff must meet the criteria. The buyer's background check can stop a sale, so make settlement conditional on the licence outcome and ask the state regulator how a sale works.
Can the vendor's contracts be transferred to me?
Only if each contract allows it. Many need client consent and some can be ended on notice. Ask for a schedule of every contract with its end date and share of revenue, and get consent in writing before settlement.
What documents do I need for a security business purchase?
The listing, the vendor's split between goodwill, equipment and stock, two to three years of financials and BAS, a contract schedule, your licence position and experience, and the security you can offer.