Many smart entrepreneurs prefer to buy an existing business instead of starting a new one. Buying a business that is already up and running will bring many benefits, including an established product or service, well-trained staff who know the business, and a number of factors that have kept the company afloat for some time.. Not having the money to buy the business doesn't necessarily stop you from buying it. Banks have tightened their commercial lending standards in recent years, but you can still find the funds you need to buy a business without using your own money. Buy a business with no money by researching financing opportunities or looking for money in places like the Small Business Administration (SBA).
Steps
Step 1. Find the right business
Buy a business that is profitable, stable and full of potential. Consider businesses that are well underway but could still benefit from the creativity of a new owner's leadership.
Step 2. Hire a broker to get help
Finding a business that doesn't require you to spend money will be difficult. A broker can help locate business opportunities, negotiate a price, and help find financing.
Step 3. Look for investors
Using someone else's money to buy a business is a great way to finance the purchase.
Develop a business plan that shows investors how they will get their money back, and how they will make additional profits. The broker should be able to source potential investors and funding sources for you
Step 4. Ask the seller about the potential to finance the purchase of the business
According to the BizSale website, more than 80 percent of business sales include some sort of seller financing of up to 50 percent of the selling price.
Step 5. Prove your probability of success
A seller will be more willing to finance if the risk is low.
- Provide a brief business history, including your experience starting businesses and turning them into successful businesses and actions to improve the performance of existing businesses.
- Share with your contacts and find out how they can help you improve your business. For example, if you are looking to buy a furniture business and have several contacts of professional designers, this will be a big plus.
Step 6. Offer good conditions
The seller will be more willing to finance if you offer to pay a generous interest rate, or a note for a limited time.
For example, propose to pay back the business within 3 years. This will give time to increase profits, attract additional investors, or secure enough financing to pay back what the seller has contributed
Step 7. Pay the seller for a 6 month consultation
This will provide an additional incentive for the seller to finance, since he will receive an income from the business.
Method 1 of 1: Buying a Business with an SBA-Guaranteed Loan
Step 1. Check your eligibility
The SBA does not make loans to buy a business, but collateral for acquisition financing.
Step 2. Borrow up to $ 1 million to acquire a business
You may be able to achieve more if a property comes with the acquisition of the business.
Combine the SBA loan guarantee with seller financing if the cost of the business exceeds one million
Step 3. Provide your tax return and personal property information
You won't need money to buy a business by having an SBA loan guarantee, but you may need to offer your home as collateral.
