How to Buy a Business With no Money

How to Buy a Business With no Money

Buying a business, or creating your own business, can be a stressful and expensive ordeal. This article will allow you to understand the best ways to buy a business with no money of your own.  There are various ways you can receive the financing to purchase a business, you just have to be creative and fully believe in your vision.

There may be many reasons why you cannot get the funding needed to start up a business. The most common of which would be having bad credit scores or low cash flows. Nevertheless, buying a business with bad credit or a low cash flow is definitely possible; it is just a bit of a tougher route.

For some people they may have money tied in investments, illiquidity can be a major reason why businesses do not open. Some people are already business owners looking to expand their current venture, or to branch into the various other business areas.

Regardless of the reasons why you want to start up a Business with no money, there is always a way. Starting a business relies on the smarts and savvy nature of the entrepreneur as a priority.

What financing options can you use?

Whilst securing a ‘free’ Business is usually a really difficult, it can be done with the right focus. Without putting any money down, most lenders are quite reluctant to borrow large sums of money. However, there are some ways around this listed below.

Borrowing from family and friends

Now of course this is not usually a feasible option that many people would recommend using. Nevertheless, this is a quite different situation and if you are hoping to buy a business with no money of your own, this may be a viable option.

Perhaps someone in your close family or friendship group has a similar business already, is interested in being a venture capitalist or can loan you a large amount of money to start the business. Remember to only take as much as you can repay and to be sure that repay them quickly.

Use a 100% seller financer

This option allows the seller to finance the business through the creation of a finance note. These are usually payable within a certain amount of years and subject to the terms previously explained with the business buyer and the financer.

This way of buying a business with no money is probably the most realistic. This way you can pay the financer with the cash flow made by the business. They can also get paid in dividends or via shares of the business depending on its success. Please be aware that this option is a rarity, but if you are able to explain yourself and your business plan well enough it could work in your favour.

Leveraged buyouts

A leveraged buyout is a great way to purchase a business with no money. The buyout can be fashioned in a way that there is a ‘no money down transaction’ if one condition is met. The business has to be sold for a price lower than the original value of its assets.

As before, these opportunities are somewhat hard to find, but if the business is struggling or experiencing some issues they may sell it for lower than its original value. Many entrepreneurs look for these types of businesses in order to make a quick turn around. If they are skilled in a certain business area, they can positively turn round the business with ease and make a quick profit.

Government Loans

There are many government loans that have been set up to allow for entrepreneurs to buy their own businesses. These usually need little to no money as a down payment. The strength of the loan that you receive is usually down to the detail of the business plan that you produce.

If you are able to properly articulate yourself and your businesses reach and profitability, the likelihood of getting a government loan is very high. It is important for you to spend a lot of time developing a meaningful business case and plan, this way you will be able to get more and more loans off of the back of it.

You can make a creative offer

Some businesses may be open to a creative offer that requires only a payment plan rather than an initial payment. This could be dependent on the current state of the business, which may make it quite a risky business decision. These businesses can be problematic, but if you have the right knowledge and expertise you could get a business for next to nothing and turn it around.

Remember that this option again is quite a rarity too, but in many situations if the business is failing they will be happy to get rid of it. Some businesses may offer a partnership deal, others will ask for monthly installments or a percentage of the ownership if you do not give a down payment.

Final thoughts

Buying a business with no money is tough, but it depends on right time or place in the businesses life. Some business owners will be happy for a new owner to come in and take over the venture if it means that it will bring it back to life. In other circumstances the former business owner may put up a fight and ask for monthly payments, dividends or a large stake in the firm.

Remember that some businesses might not be a worthy investment, even if you do not have to pay for them upfront. It is important to know if the business is experiencing certain issues, if you are aware of them then you can better prepare for them. This way your business plan can encompass them and you can develop a plan to fix them so the business generates a better profit.

Buying a business for with no money, whilst risky, could be a massive investment and turnaround. You could completely rejuvenate a failing business, making it your own and positively enhancing the brand.


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