Very few buyers pay the full price from savings. Most stack two or three sources of money. Here are six common ones.
1. Your own down payment
Nearly every lender and seller wants to see you put in your own money, often 10 to 30 percent of the price, depending on the deal.
2. Bank or lender term loans
A term loan repaid over several years is the most common form of acquisition financing. Lenders look at the business’s cash flow, your experience and your credit.
3. Government-backed loan programs
Some countries have loan programs that reduce the lender’s risk and can make financing easier. Ask a lender which apply where you live.
4. Seller financing
The seller lets you pay part of the price over time. It shows the seller believes in the business, and it can bridge a gap. See our guide to seller financing.
5. Investor partners
An investor puts in money in exchange for equity or a share of profits. It lowers your cash needs but you share the upside.
6. Asset-based or equipment financing
If the business owns valuable equipment or inventory, some lenders will lend against those assets.
How to choose
Work backwards from cash flow. Whatever you choose, the payments must fit comfortably inside what the business earns. Our Deal Check on each listing shows that at a glance.
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This article is general education, not financial, legal or tax advice. Talk to a qualified accountant and lawyer before you buy, sell or invest.