Buying A Business In the UK
Learn How To Buy A Highly Profitable UK Business.
How can you be sure a particular UK business is a worthwhile investment?
- It’s not about the overall appearance of the UK business.
- It’s not about what the seller initially tells you.
- It’s not even always about the location…
The ‘real secret’ to buying a profitable UK business is in knowing the exact strategies to use at each step in the buying process and by conducting an impeccable analysis, review, negotiation and valuation to be certain you pay the right price and terms and uncover any potential problems before you complete the transaction.
Secrets To Financing Your UK Business Deal.
If you’re thinking about buying a business, you’ll be pleased to learn that financing the purchase is generally quite easy. In fact, it’s far simpler to get the money you need to buy an existing business than it is for a start up. Most people simply don’t realize how to do it. Don’t get the wrong idea: you’re not going to buy a business, at least a good one, with no money down; that only happens in the infomercials.
Many prospective business buyers mistakenly believe that traditional lenders will welcome them with open arms when they present them with a business they’re looking to acquire. Unfortunately, nothing can be farther from the truth. It still amazes me how the banks have got most people fooled. They run these great ad campaigns promoting themselves as “business/client friendly” but try to get them to lend you money to buy a business. It won’t happen.
It doesn’t matter how experienced you are, or what your relationship is with them.
Unless you’re prepared to collateralize the loan 100% with non-business and personal liquid assets, they aren’t going to give you a penny. So don’t waste your time seeing them. With the terms they offer, it’s just not worth it.
The landscape is pretty lopsided when it comes to how people buy small businesses. 90% of all transactions involve some financing. Only 10% are all cash deals. Even if you’re inclined to pay all cash, my advice is not to do so, unless you get a very hefty price reduction: at least 20%.
Seller Financing.
The majority of small business acquisitions involve seller financing. In fact, it’s estimated that over eighty percent include some for of financial aid from the former owner in most regions.
While the percentages vary, it’s generally 30% to 50% of the total purchase price. When you think about the situation, it makes perfect sense. First of all, by providing financing, the seller validates the viability of the business itself. Also, the seller is able to get the highest price possible by funding part of the acquisition.
From a buyer’s perspective, it serves to reinforce that the seller is also at risk in the transaction. It’s a perfect mechanism to help ensure that what you’ve been told by the seller is true and accurate. It also serves as a mechanism to deal with situations that may arise later on that come about as a result of their actions where you may need the ability to offset their financing.
While the terms vary for seller financing, you can expect to pay about 6-8% over four to five years. Plus, you have the ability to get far more creative with seller financing than any other:
- Negotiate a holiday from any payments for three-six months after closing.
- Allow for the first year to be all principal.
- Have the right to make lump sum payments several times a year towards the principal.
- No prepayment penalty.
- You can arrange for lower payments throughout the loan with a balloon payment down the road.
- While you will have to sign personally, you will not have to personally collateralize the loan. The seller’s lien is against the assets of the business.
Bank Financing.
Most small business friendly banks in the UK will be open to your proposal. However, you must keep in mind that they may not necessarily want to secure a loan with the business’ assets and will instead, want personal security. This is a tough decision that you must make.
The good part is that they may be willing to lend you a greater share of the total deal and so you’ll be able to leverage your cash down payment much farther.
So What’s Your Best Bet?
Unless you’re buying a business for under $100,000 or getting an enormous price concession, don’t pay cash. As for bank loans, while their rigid guidelines will help to confirm the viability of a business, unless you’re making an acquisition where you cannot finance the down payment, I tend to place this as my second choice.
I am a huge believer in seller financing. It’s like buying a used car with an extended warranty paid for by the prior owner. There’s no substitute for the flexibility you can achieve, or the favorable terms, plus, more than anything else, it really forces the seller to share in the risk. If I’m going to buy someone else’s business, I want to be darn sure that they’ve got a stake (or risk) in my success as well.
My advice will help you make that call. But take your research to the next level by getting a copy of our special guide, “How To Buy A Good UK Business At A Great Price©.”
About The Author.
My Name is Richard Parker and I have personally purchased thirteen businesses during my career and built several others from start-up. The information in my programs are based on real-life, hands on experiences. I have provided consultation to thousands of prospective business buyers who have used my materials, attended my seminars, followed my guidance and expertise to buy good businesses in every type of industry you could possibly imagine.
It has taken a lot of time, effort and some painful experiences to develop the tried-and-true formulas that immediately identify a good business. More important is recognizing what particular business is ideal for the individual. Good businesses run by the wrong people quickly turn sour and that’s why so much of our material is devoted to helping each client buy the right business for them.
Expert Consulting And Support At Every Step.
Along with the program you can consult directly with Richard and a team of experts as often as you wish during the business-buying process and there is no additional charge for this service and support.
Our Unconditional Money Back Guarantee.
After you receive the material, if for any reason whatsoever at anytime in the future, you are not 100% satisfied, or if you don’t believe that we have equipped you with all of the skills and knowledge you’ll need to buy the right business, just let us know at any time and we’ll immediately refund your entire purchase price.
No questions asked! No time limits! No hidden clauses! No fine print!
Not only are we going to help you eliminate all of the guesswork from buying a business, we have also removed any risk when you decide to purchase this program.
Why Our Products Are Unique.
The How To Buy A Good Business At A Great Price© series is not a generic introductory book about buying a business. The information provided are proven strategies that work and have been compiled from over one thousand successful business purchases and business for sale analysis and investigations over the past twenty years. This material is for the serious business buyer who realizes that in order to be successful, they must be equipped with specific knowledge and have access to unbiased expert advice to be certain they make all the right decisions.
The materials are laid out in a step-by-step format that mirrors each specific stage of the business-buying process. The program is geared to give the buyer the advantage in the purchase and to eliminate the risks associated with buying a business. As such, the information clearly explains what a business buyer needs to know at each step, what they must do, and exactly how to do it.
Plus, we provide ongoing expert consulting support to assist you at every step.
The materials also include automated valuation spreadsheets, legal agreements, business plan templates, specific language for purchase agreement terms and case studies.
Visit the program’s main page at www.businessbuyeradvice.com where you can learn more about this product or make a purchase.
If you have any questions please contact us
