Business Finance

WG0608

How much you can borrow to purchase a business? I realise there will be many factors relating to the purchaser and the business that could affect this, but is there a general rule such as 40% for a leasehold business and 60% for a freehold business?

Mark7799

How much does the business cost?
How much do you have to put into it?
Have you got accounts for the business for the last three years?
What are you actually getting for the purchase price - how much for assets and how much for goodwill?
Why is the business for sale?
There's no percentage rule as such but you wil need to know all the above and have a good business plan ready.

DCFC79

You might be asked what you can use as collateral or what your willing to put up yourself.

Apples2

http://forums.moneysavingexpert.com/showpost.php?p=67995299&postcount=711

DCFC79

Apples2 wrote: »

http://forums.moneysavingexpert.com/showpost.php?p=67995299&postcount=711

In that case OP concentrate on selling your house first, sort your debts out and then look at buying a business.

WG0608

Yes, that's the plan. When the house is sold and our debts are paid we plan to rent a house and use the equity from our house sale, which should be 80k - 100k to buy an established business.

WG0608

To expand on our problem, our business closed 6 months ago. This was a family business that had always provided a decent income, but became unviable due to a change in legislation.


The debts we have are mortgage arrears and an unpaid business account overdraft from when the business closed, altogether around 9.5k.


We are also owed 25k by an at the time friend. We loaned the money to her to start her new business 3 years ago. At the time we had just sold my wife old flat which we had been renting and our business was doing well.