Finance to buy a business: your questions answered

These pages answer the finance questions that come up before an offer is made on a business. They cover whether you can borrow to buy a business at all, how much deposit lenders expect, how using home equity works and what it puts at risk, and the difference between secured and unsecured loans. Each answer is written from the point of view of a credit assessor: what is checked, which numbers apply and where applications commonly fall over. The full picture is set out on the loans to buy a business page.

The pages also cover the parts of a deal that sit outside the main loan. That includes how lenders treat goodwill and which industries attract goodwill lending, how vendor finance and earn-outs fit alongside a senior lender, how franchise accreditation changes what can be borrowed, what happens when the business and the freehold are bought together, and the documents a lender needs from both the buyer and the vendor. The information is general. Tax, legal and structuring decisions should be made with an accountant and a solicitor.