How to get a loan to buy an existing business

If you’re looking to acquire a business and don’t have the upfront capital, you're probably wondering whether you can get the funds through a business loan. 

The answer is yes - if you’re eligible. 

One of the benefits of buying an existing business is that it’ll probably already have a financial history behind it, making it easier for lenders to decide. 

Depending on the business in question, it might also have an established brand, customer base and presence in the market, meaning you won’t have to build everything from the ground up. 

The operational infrastructure - from the staff on the ground to the premises and equipment - might be included in the sale price, so you won’t have to worry about meeting lots of upfront costs. 

In short, buying an established business can be a more risk-averse approach compared with starting a new enterprise. But it’s not always, and every business acquisition comes with its unique challenges and considerations. 

Do you want to buy a profitable brand?

If you’ve got experience in a particular industry, you might be looking to buy a business that has a solid reputation and solid customer base. Perhaps the current owner is retiring and wants to pass the company on to someone knowledgeable. 

Before purchasing a company, it’s essential to do a complete evaluation. 

Consider looking for a qualified solicitor and accountant to help you do your due diligence and conduct a thorough investigation into the company’s reputation. 

Among other things, you can look for mentions of the company on social media. This will give you a more unbiased insight into how it’s perceived instead of just looking at the company’s own social media pages. Check out Trustilot and Glassdoor too. 

Or are you purchasing a business in distress?

Perhaps you’re looking to buy a business in distress.

If this is the case, you’ll need to approach the acquisition with experience, patience and enthusiasm for seeking out opportunities. You’ll have to work hard on rebuilding trust with customers to turn the business around and start making a profit. 

Business finance lenders will want to see evidence of a proven track record and the right mindset and goals. Transforming a failing business into a successful one requires much grit, but it can be an advantageous experience. 

Loan options for a business acquisition

There are many potential lenders and options on the market today that provide funding for business purchases. At Funding Options, we work with over 120+ lenders, and our technology can match budding business owners with suitable options for their needs. 

Here are a few types of business finance to explore:

Whatever the industry or size of business, kickstart your business acquisition journey by seeing what business funding you could be eligible for today.