Loans to Buy a Business 2018-03-25T12:28:08+00:00

Loans to Buy a Business

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Buying a Business Using a Loan

We partner with lenders across the market to provide funding for business purchases, regardless of size. From small businesses to large multi-million-pound takeovers, we can help. Our business acquisition loans are unsecured and designed for smaller business purchases.

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Criteria

Unsecured business purchase loans offer little comeback for the lender in the event of default. As such, the criteria is relatively strict. We can arrange unsecured business loans to buy a business on the following basis:

  • Borrow from £25,000-£100,000
  • Only profitable businesses considered
  • Terms from six months to five years
  • Rates from 5.7% p.a.
  • Clear credit history required

How Much Can I Borrow?

Our unsecured business acquisition loans are available between £25,000-£100,000. The amount you can borrow will depend on several factors.

The loan must be affordable, and as such, the accounts will be closely scrutinised before a judgement can be made on how much you can borrow. The lender will also look into your previous record before issuing an unsecured business loan and will usually want to see a clear credit history, with no defaults or CCJs (County Court Judgements).

Do I Need A Deposit?

No, we don’t always require a deposit to lend when you’re purchasing an existing business. Where borrowing is unsecured, the lender will make a judgement on whether a deposit is required, however, we are often able to lend without.

Do You Lend On Larger Takeovers, Mergers & MBOs?

Yes, we can fund much larger acquisitions, mergers and MBOs (Management Buyouts) but this type of funding is quite different to smaller business purchases. We can fund large acquisitions on a bespoke funding basis.

You can find out further details on our offering by talking through your circumstances with one of our advisers.

Advantages Of Buying An Existing Business

There are a number of advantages to buying an existing business rather than starting a new one – here is a look at the pros and cons of this approach:

Advantages

  • Buying a profitable business means you will be able to enjoy immediate income and cash flow
  • Established trading businesses will have an existing customer base to market
  • Processes and supplier lines will already be in place and operating well
  • You can be secure in the knowledge that your business is profitable and has suitable demand
  • A strong reputation will stay with the business

Disadvantages

  • You will pay a premium for a strong business
  • There is a danger that some customers may no longer work with you once the previous business owner has moved on
  • Any previous reputation or customer service issues will become your problem
  • You will be bound by any contracts agreed to by the previous owner
  • Staff may be resistant to a new way of doing things

What Information Do I Have To Provide?

When applying for a loan to buy a business, you will need to provide certain information to the lender to enable them to make a lending decision. Although the exact documentation needed will vary from application to application, the lender will usually need the following:

  • A fully completed application form
  • Financial projections outlining expected future trade
  • Two years’ accounts for the business
  • Six months’ personal bank statements
  • A CV detailing any relevant experience
  • A detailed business plan

What if There Are No Assets?

Unsecured business purchase loans are designed to be taken without security. As such, although applications where the business has a strong asset base are desirable, it isn’t crucial. If you’re looking to buy a business with no assets, let us know and we may still be able to fund it.

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