Share This Info:  

Buying A Small Business With No Money Down! Is This Possible?


How To Buy A Business With No Money Down

In The New Economy that we are buying and selling and businesses in, finding funding can be the most challenging part of a small business sale.

Many business buyers will have limited funding and need to finance a good portion of the sale but what happens when a buyer has NO money for a down payment or for the purchase price at all?

Can you actually buy a business with no money?


My short answer is yes, you can, but not without the right circumstances. If the right seller presents themselves you may have a shot at buying a business( with no money. But don't act too soon. The truth is, you may be able to BUY a business with no money but RUNNING a business with no money may be a problem.

100% Seller Financing

If you find a seller that is willing to offer you 100% financing then buying a business with no money may actually be a reality for you.  In The New Economy, there are a many sellers that are willing to offer some sort of financing as a part of the sales agreement.  In fact, many lending institutions now look at whether or not the seller is offering any sort of financing.  If they are, it gives the deal some credibility with lenders because it shows them that the seller is confident that the potential buyer has the means to run the business successfully and repay their loans.

In most deals that I have seen, sellers are typically willing to offer owner seller financing for 20 to 50 percent of the remaining balance after the down payment is made. Someone who is willing to offer 100% financing is going to be someone that really wants to walk away from the business but doesn't necessarily need the money right away. Finding a seller that is will to provide 100% financing for the sale of their business may be tough as it is seen as a risky move and most sellers will need or want their money sooner than later, but still this type of sales agreement is not unheard of.

Alternative Sources Of Financing

If seller financing isn't going to work, you can also consider exploring alternative funding sources. Seeking out an angel investor may be a potential source of funding. Angel investors don't award funds based on the same criteria as a traditional lender so the amount of money you have to put down probably won't matter. You can also consider other sources such as friends and family and your 401k or retirement savings.

Potential Pitfalls

If you are lucky enough to find a seller that is willing to work with you on financing 100% of the sale, you should understand that an agreement like this will likely come with some comprises on your behalf. For example, businesses in which the seller is providing financing usually sell for a higher asking price then one that requires a buyer to find financing on their own.  Sellers know that they are providing a valuable service to a buyer by offering financing so they charge a premium for the business. Also understand that you may pay a higher interest rate for a deal like this.

Lastly, I would never want to discourage a buyer from pursuing a business for sale that they thought was the right fit over lack of money BUT the truth is you need to proceed very carefully if you don't have resources to fall back on once you own the business. Unexpected expenses are going to come up. If you don't have the means to finance them and the business can't absorb them, you and your business could be in trouble. Understand that just because you find a way to buy a business with no money doesn't mean it's the right thing to do. Carefully evaluate your personal situation and the business before deciding whether or not you should take the risk of buying a business with no money in your reserve to back up your venture.

About The Author:  Peter Siegel, MBA, is the Founder of BizBen.com (California Businesses For Sale), the BizBen Network, and is the Director of the successful BizBen ProBuy Program (90% success rate) for business buyers. He has recently published an eBook on How To Buy A California Small Business that is available online. If you need assistance in your search to buy (or finance the purchase of) a California business and would like to speak with Peter Siegel, phone him direct at 925-785-3118.


Categories: BizBen Blog Contributor, Business Purchase Financing, Buying A Business, Deal And Escrow Issues, How To Buy A Business


Comments Regarding This Blog Post


This would be extremely rare, and a buyer would have to ask, "Why is the seller willing to risk so much to walk away?" A buyer would still have escrow fees, paying for inventory, taxes on fixtures, furniture and equipment, and deposit for the landlord, among other things floating capital to operate the business. I would strongly advise a buyer to be cautious when getting into an agreement like this, because if it fails, the buyer would still be on the hook with the landlord for the lease.


  Helpful Resources To Assist In Selling And Buying California Businesses
Peter Siegel, MBA - SBA Loans, Non SBA Financing Assistance

For over 25 years I have provided niche business purchase financial advisory and loan placement services with SBA and Non-SBA Loans, Retirement Plan Conversions, Private Investors, etc. Financing amounts available: $20K to $7MM. Call today to get pre-qualified or receive financing: 866-270-6278.

William Park, Business Broker - Southern California

Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.

Rob Hartman: Business Broker, SF Bay Area

Business brokerage services in the SF Bay Area. I bring skill, integrity and energy to all of my clients and our projects. I'm accustomed to working with a wide variety of clients and their businesses; large or small, simple or highly complex. Get a free consultation by phoning 650-279-3097.

Larry Larsen, Broker, Laundry Specialist - Orange, LA Counties

I have over forty years of experience in the sales, ownership, management, and construction of coin laundries. He is a licensed broker active in the sale of coin laundries, a licensed insurance agent specializing in coin laundry insurance.

Chuck Post: Laundry Buyer Representation, Consulting, Due Diligence

Chuck Post has 32 years experience in the laundry industry, specializing in assisting laundry buyers (and entrepreneurs) with buying or starting up, building, re-tooling, laundries throughout California. Laundry buyer representation, consulting, due-diligence, lease negotiations, laundry valuations.

Michael Floorman, Business Broker, BTI, San Francisco Bay Area

Business Team, San Jose (Campbell) located in the Pruneyard Towers at Bascom and Hamilton. Established in 1981 Business Team with over 6600 sales to date has 1000 business listings to choose from, paid Google advertising. We offer highly trained and experienced professionals.

Taj Randhawa, Business Broker Specialist - Gas Stations, Liquor Stores

If you are interested buying or selling a gas station, liquor store feel free to phone me for a consultation. My vast experience & specialization in gas stations & liquor stores helps me in serving my clients with full confidence, trust & sincerity. Serving Central Valley, SF Bay Area. 559-259-4247.

Timothy Cunha, JD - Business Broker, SF Bay Area

I am an experienced entrepreneur, attorney, & business professor. I & my EvergreenGold team offer business owners sound advice & expertise to build business value & achieve profitable sales. Call me today for a FREE business evaluation & SWOT analysis for your business anywhere in the USA.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Specialty Restaurant Broker Discusses Liquor Licenses & Working With The ABC

What you will read in this BizBen blog post you will probably not find in any manual or set of instructions provided by the ABC (liquor licenses in California). This blog post by Jeff Back (SF Bay Area Restaurant Broker Specialist) at 925-736-8200 discusses this topic of liquor licenses in detail.

Laundromats: Are They Good Investments For Business Buyers? We Discuss This.

Are laundries good investments for buyers? Chuck Post, (at 619-227-5711 - California laundry consultant, due diligence services, and laundry buyer representation) discusses this topic with other advisors & brokers in this BizBen Discussion about laundry investments and if they are good investments.

Selling A Laundromat? Top Tips: Valuation, Pricing, Finding Buyers, Resouces

Laundrys are popular choices among business buyers as they often can be successfully run as an absentee run business. You need to be strategic about when you sell your Laundromat so you don't get taken to the cleaners! Peter Siegel, MBA (at BizBen) provides laundry purchase financing - 925-785-3118.

Laundry Broker Explains Laundry Leases: 4 Big Issues For Buyers And Sellers

Chuck Post (Laundry Buyer Rep, Consultant, Due Diligence) discusses what laundry buyers and sellers should consider when reviewing and considering a laundromat lease. A must read for potential laundry buyers and owner/sellers of card and coin operated laundromats. Reach Chuck at 619-227-5711.

When Buying A Laundry Why Buyers Should Have An Exit Strategy When Buying

Chuck Post (reach him at 619-227-5711) a laundry consultant, specialty broker, buyer representative & due diligence advisor starts this discussion on why it's important to have an exit strategy in mind while buying a laundromat! He & others explain why this concept is so important to serious buyers.

Liquor License Assistance - SF Bay Area - Jim Saxton

Jim Saxton - 20 years experience of local governmental requirements, such as Police Departments, Zoning / Planning Departments, ABC District Offices, my company Liquor Licenses of SF Bay Area is very qualified to resolve all of your concerns during the liquor license transfer process. 925-787-0770.

FREE Live Laundry Seminars For Buyers: See Our Upcoming Schedule Of Seminars

Looking to buy or start up a card or coin laundromat? PWS Laundry is presenting their schedule of upcoming Seminars for laundry buyers & entrepreneurs. These informative live Seminars will cover an overview of the laundry industry, selecting the right location, an overview of leases, Q&A, plus more.

FREE Online Webinar This Week: For Buyers - How To Buy & Value Laundromats

Chuck Post hosts this live FREE online webinar on How To Buy & Value A California Laundromat. Webinars are scheduled every week! Have your questions ready for an open and honest discussion about both the pros & cons of the laundry business. Phone 619-227-5711 for more information & to RSVP today.

See All News, Tips And Events


Business Purchase Financing SBA Loans
Health Care Broker Ralph Santos
Larry Larsen Laundromat Broker
Tim Cunha Business Brokerage
Facebook
Twitter
Linkedin
Google Plus You Tube
Vlogs and Podcasts


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million



BizBen - Where California Deals Get Done! 925-785-3118
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2019, All Rights Reserved

               Vlogs and Podcasts  
Join Us On Social Media - Content Updated Daily
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.
Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Liquor License Assistance - SF Bay Area - Jim Saxton
Read More News
Laundromat Business Valuations: Could Buyers Of Laundries Be Overpaying?...
Read More News