Excite

How to start raising finance to buy a business

Only the very wealthy could afford to purchase a business outright, so do not let the lack of funds put you off straight away. Most people have to borrow the funds to cover their purchase whether they wish to buy a multi-million pound company or a hotel in Wales.

Raising the finance to buy a business should start with your bank. Bank funding is the most popular type of finance for new businesses according to the British Chambers of Commerce, so do not worry your bank will laugh at your business proposals. Typically, a bank will lend up to 60% of the total cost of the business, depending on personal circumstances. This leaves you with an investment of 40% to find from an alternative source. Bear in mind that your bank will need to be convinced your proposed business venture is sound. They are unlikely to lend you anything if you do not have a coherent business plan set up to convince them to finance you.

When turning to a bank for help raising finance to buy a business, they will ask to see fully-audited accounts for the business in question. You will need to supply at least three years, if not more, of accounts. They may also be interested in the projected income of the business once you take over. There is nothing to fear here and it is best to offer up all information honestly. You should also include a clear business plan, detailing your plans for the business in the next five-years. You will need to be credible here and prove you have researched your potential business' target market. Make it clear to your bank that you are not happy just running this business, you are looking to improve it also. The bank will also require an official valuation of the business, usually organised by them and carried out by a representative from the bank.

Your own personal details are also just as important as your potential business when it comes to raising finance to buy a business. Most banks will ask to see your CV to assess if you have experience in the field in which you plan to open a business. They will also want to see all bank and credit card statements as prove you are solvent and capable of carrying out a financial relationship respectfully. Most importantly, they will need to see identification, so they know you are who you say you are. This is usually the form of a driver's license and council tax bill.

 

 

United Kingdom - Excite Network Copyright ©1995 - 2019