by Juan Ramos

Created on: October 06, 2010   Last Updated: October 08, 2010

Most people in the world who want to buy a business never will and financing is one of the reasons. Plenty of people out there always ask me, where are you going to get the money to buy a business? Believe it or not it is possible to finance the purchase of a business even if you don't have a big amount of money. However just because you don't need your own personal bank to finance the business purchase, you still need to have some skin in the game. The skin in the game comes in the form of a little bit of your own money and your ability to raise the rest. Financing is one of the most critical parts of the business buying process. Most people looking for a business actually wait until they have found a business before they worry about where they are going to get the money from, this is wrong. Anyone looking to actually close a deal and buy a business needs to figure out how they are going to finance the business purchase prior to finding a business. Without having the money needed to exchange keys to the business you have no deal. In this article we will discuss the importance of financing, how to arrange financing prior to having a business, and where to look for financing. 

♦Arranging Financing

Most people never have 100% of the business price in cash available when they buy a business and even of they did they shouldn't pay it all off anyways because putting all of your eggs in one basket is not the best thing to do. All you future business owners need to know is how to obtain your down payment, the very minimal amount of cash required to complete the deal and get you up and running. Now even though you might not have chosen a specific business you need to have an idea of what area your business is going to be in so you can prepare a good business plan. A good business plan is usually more critical for start ups who have no solid data on performance however if you are buying an established business most official lending sources like the SBA and banks will require one. In reference to financing, the business plan needs to include things like your personal biography/your personal financial situation, your goals, how you plan to attain them, growth or marketing strategy, and more.  

The basic concept you want to understand when presenting anything to lenders prior to buying a business is that you need to show them that they can have confidence in you with their money by showing them what you are going to do with the money and most importantly

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