Buying Guides

Financing the purchase of a small business

Buying a Business Guide Image

A considerable proportion of the businesses we sell require some form of lending to finance the business purchase. At Intelligent, we recommend looking at your buyer finance options before you start seriously considering a business. This will ensure that you are looking at businesses that you can definitely afford and avoid any pain further down the line.

Financing to secure the purchase of a business is far easier in the current climate than securing a loan for a start up or early stage business. This is one of the main reasons why an increasing amount of people with limited capital are looking to buy a business rather than start from scratch.

When you are looking to secure funding there are a few areas to consider that will improve your chances of securing a loan:

Your Plans For The Business

It’s a good idea to put together a business plan if you’re looking to secure a loan for your purchase. Banks often want to see that you understand the business and have accurately reviewed the financials. This will involve performing your own due diligence reviewing equipment, inventory, general assets and any relevant stakeholder relationships including suppliers, customers, etc.

At Intelligent, we can offer access to free business plan templates and give you advice for securing a loan. Contact our team on 0800 612 7718 or email our team.

Demonstrate Your Expertise

A key aspect of the banks review process will be your personal credentials and experience in related areas. Don’t worry too much about direct experience in the same industry as you are considering purchasing a business, we sell many businesses to people who go on to have great success in a completely new industry. The banks will be looking for people who can simply show that they have considered the transition period and how the business will be successful moving forward.

Committing Your Own Funds

Banks will want to see that you are financially committed to your business purchase by bringing a reasonable amount of capital to the table. The higher the amount you commit to the purchase the more favourable your lending conditions will be. However it is possible with right conditions and plan to borrow as much as 70 percent of the buying price.

Buyers provide their collateral for purchases from a range of sources from life savings, inheritances and redundancies to releasing equity in a house.

At Intelligent Business Transfer we have developed a close working relationship with Natwest to assist our buyers with securing finance for purchasing a business. We are here to help, for more information view our dedicated finance to buy a business page or contact our team on 0800 987 0813 to discuss your options.