A guide to creatively financing a business purchase
Seeking the right company to purchase is a very competitive process. Often, money is the most critical weapon a business buyer has to differentiate themselves from all the other business buyers, who have found the same business that is on the market.
When you find a business that ticks all the right boxes but initially exceeds your budget, you will have to be creative and resourceful before you can commit to buying.
Here are some ideas of how you can get the necessary funds for your business purchase:
The buyer’s personal funds:
1. Cash savings
2. A private loan from a friend or family member
3. Advances from personal credit cards
4. Obtain a bank loan secured with high value personal assets, such as your home or car(s)
Other funding sources:
1. Bank loan to the business
2. Asset loan to the business
3. Loan from current supplier(s)
4. Finance or sell off all existing excess stock owned by the company
5. Sell high value assets and lease them back or finance them
6. Sell high value equipment outright and time share or borrow other like equipment
7. Sell the car park land or your business’ allocated spaces
8. Sell or sublet the part of the building (if owned) and get advance payments
Negotiate outstanding business purchase balance arrangements:
1. Defer the initial payment for as long as you can
2. Assume more or other liabilities not originally in the purchase contract
3. Let the seller retain all receivables
4. Negotiate extended payment terms with your new suppliers
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Tags: business buyer