How do I raise the funds to buy a business?
What are your funding options when you've found a good opportunity to buy a business?
If you don’t have enough funds, you can look at bank loans, line of credit, angel investors or do a vendor loan. A vendor loan is when the seller extends you a loan to buy the business, and the loan is paid from the profits of the business. It’s best to speak to your accountant and business broker on the best option.
If you think raising the funds to buy a business is extremely daunting and seems totally out of reach, you're not alone.
But the good thing is there are options available for budding business owners. The best option is to apply for a business loan, but it's important to note that this is quite different to applying for a business loan if you're already up and running.
You'll have to have a clear idea of how much capital you'll need, a detailed business plan and roughly how long it will take to repay the loan. To be approved for a loan to purchase an existing business, you'll need to gather as much evidence (stats, data, financial projections, etc) to convince your lender why this venture will be profitable.
Also highlight your expertise, experience and why your're eager to take this opportunity to instill good faith that you're capable of succeeding.