Where Can I Get Funding to Buy a Business?

Where Can I Get Funding to Buy a Business?

Here are some of your options for finding business acquisition funding.

By Marcia Smith

UK business finance initiatives vary and if you’re hoping to acquire an existing business, you may find many schemes closed to you.

The most consistently available source of business acquisition funding is one of the commercial business acquisition loans offered by banks. Shop around for favourable interest rates and flexible repayments. You may need to provide collateral.

Other avenues to consider include a secured loan (if you need less than £250k), credit cards (if you can find a 0% interest deal), using your personal funds or borrowing from family or friends.

This is an instance in which commercial brokers can be particularly useful. It’s difficult to navigate the waters of acquisition finance, while a broker will have a number of lenders on his or her books and will be available to package your deal in such a way as would be attractive to one of these lenders.

If you manage to make the purchase, be sure that you have a plan in place. Look to mitigate your outlay using the new company once it’s secured. Surplus stock can be sold off, loans secured on its assets, or you could negotiate a reduction of your up-front payment in return for an extended earn-out agreement.