Financing options
for the purchase
of a business
A loan isn’t the only option available to finance a business acquisition. A purchaser must consider these alternate financing options if they can’t locate a suitable lender or the authorised loan amount isn’t sufficient to pay the entire acquisition price.
If possible try to negotiate some financing from the seller. Although some vendors want to make a quick buck and move on, others may be willing to wait for payment. This form of financing may be included in your share purchase contract, allowing you to avoid going to the bank entirely.
Try to find investors or business partners. You may split the investment needed between them. But keep in mind that doing so will have an impact on your level of control and how you run your company; who is in charge, and how earnings are shared?
Make use of your own cash. You may use investments and other sources of income to help fund your new business in addition to your normal savings. Just be aware of the tax implications and the risks of draining your emergency fund or retirement savings: