Funding a business purchase

ntb1

Whats the best way, we have some cash but not enough, it's an already trading business with what looks at first glance of the accounts as a good gross profit/net profit. We have plenty of equity in the house.

This would be a business for my OH so only looking at replacing her wages, though we could survive for a couple of years on just my money, should it not work the we are planning now.

thoughts please

Pennywise

Realistically, you're best getting a re-mortgage on your home if there's plenty of equity in it. It'll be easier to get and likely to be cheaper than a business loan which usually have higher interest rates and hefty set up fees.

Alternatively, if you're buying a lot of tangible assets, such as plant, equipment or vehicles, you could raise some of the funds by asset based finance, such as leasing or hire purchase.

Unsecured bank lending, such as a bank loan or overdraft, will be very limited, just a few thousand at most. And banks don't lend on goodwill or other intangible assets such as web domains, brands, etc.

But before all that, you should consult an accountant to make sure the numbers stack up and seek their advice in several areas, such as borrowing, whether to set up as a partnership or a limited company, tax implications and projections, and help with negotiating the price, i.e. not just the price itself, but also checking what exactly is being sold, i.e. just the business assets or the limited company itself. Lots of pitfalls for the amateur!

ntb1

Thanks for that, we will be speaking to an account etc once we've got the accounts so we can look at if its worth trying to procced.