How to finance buying a business in Australia
The main ways buyers fund a purchase, what lenders look at, and how to prepare before you make an offer.
Common ways to fund a business purchase
Business acquisition loans (banks)
Usually the largest part of the funding. Lenders generally want a deposit from you, a business with a steady profit history, and often security such as property. Terms and appetite vary between lenders.
Vendor finance
The seller agrees to receive part of the price later, paid from the business's profits. It can reduce how much you borrow and shows the seller has confidence in the business. Always document it properly.
Your own funds or equity
Savings, home equity, or a partner or investor contributing capital. Bringing in partners means agreeing ownership, roles and exit terms upfront.
Equipment and asset finance
For vehicles, machinery or fit-out, asset finance can be used alongside a main loan, so the loan is secured against the equipment itself.
What lenders usually look at
- At least two to three years of financial statements and tax returns for the business
- Evidence that profit can comfortably cover loan repayments
- Your deposit, personal financial position and credit history
- Your experience in the industry or in running a business
- Lease terms, especially the time remaining and options to renew
- Any security you can offer, such as property
Six steps to prepare
- Know your budget and deposit before you look at listings.
- Speak with a finance broker or lender early to understand what you may be able to borrow.
- Ask for the business's financials and check they support the price and repayments.
- Include working capital, stock, legal, accounting and stamp duty costs in your total.
- Make any offer subject to finance and due diligence.
- Get your accountant and solicitor to review the finance and purchase terms.
Frequently asked questions
How much deposit do I need to buy a business?
It depends on the lender, the business and the security available. Many buyers contribute a meaningful share of the price themselves, so speak to a lender or finance broker early to confirm your situation.
Can I buy a business with no money down?
It is uncommon. Most purchases combine the buyer's own funds with a loan and sometimes vendor finance. Be cautious with offers that promise no-deposit purchases.
What is vendor finance?
The seller lets you pay part of the price over time, usually from the business's earnings, instead of receiving it all at settlement.
Is it easier to get finance for a franchise?
Some lenders are familiar with established franchise systems, which can help. The individual site's performance and your own position still matter.
Ready to look at opportunities?
Browse current listings or talk to us about preparing to buy.
This guide is general information only and does not take your personal circumstances into account. It is not financial, credit, legal or taxation advice. Speak with a licensed finance professional, accountant and solicitor before acting.