Lender guide
Lenders for buying a business
Most business purchases are funded by a mix of the buyer's own money, a loan from a lender, and sometimes deferred payments to the seller. The right lender depends on the size of the deal, the type of business, and what the lender can take as security.
This page explains the main types of lender for business purchases in the UK, and links to our guide on each one.
The main types of lender
- High-street and challenger banks. Often the lowest cost for well-established, profitable businesses with good security. They usually want a solid trading record and a clear plan from the buyer.
- Specialist and alternative lenders. More flexible on structure and sector, often lending against future cash flow rather than just property. Many focus on larger deals, typically from £1 million.
- Asset-based lenders. Lend against what the business owns, such as property, stock, equipment or unpaid invoices. Useful where the business has valuable assets.
- Government-backed lending. Accredited lenders can use the Growth Guarantee Scheme to support deals they might not otherwise fund, for facilities up to £2 million.
What lenders look at when you buy a business
- The business's trading record: profits, cash flow and how steady they've been.
- Your contribution: how much of your own money you're putting in.
- Your experience: whether you, or your management team, can run the business well.
- Security: property, assets and personal guarantees the lender can rely on.
- The price and the deal structure: whether the price is fair and repayments are affordable from the business's profits.
Lender guides
Growth Guarantee Scheme
The Growth Guarantee Scheme (GGS) is a government-backed scheme that helps accredited lenders fund smaller UK businesses, for any legitimate business purpose. For buyers, it can make a lender more willing to fund a deal it might otherwise turn down. We can help you find accredited lenders that use it for business purchases.
Allica Bank
Allica Bank can fund a business purchase in two main ways: business loans of up to £350,000, and Growth Finance of up to £15 million for larger deals and buy-outs. Each has its own rules, so this guide explains who Allica suits, and where to turn if your purchase doesn't fit.
Not sure which lender fits?
Tell us about the business you're buying and where you are in the deal. We'll match it with lenders that fund your type of purchase and guide your application through. There's no fee to you; we're paid by the lender.
Frequently asked questions
How much deposit do I need to buy a business?
It varies by lender and deal. Lenders usually want the buyer to put in some of their own money, and the amount depends on the business's profits, assets and the strength of the deal. We can tell you what lenders are likely to expect for yours.
Can I get a loan to buy a business with no experience in that sector?
It's harder, but not always ruled out. Lenders put weight on the buyer's experience, so a strong team, a handover period with the seller, or relevant management experience can help.
Can the seller help fund the purchase?
Yes. Sellers sometimes agree to receive part of the price later, known as deferred consideration or vendor finance. Lenders often see this positively, as it shows the seller's confidence in the business.
How long does business purchase finance take?
It depends on the lender and the deal's complexity. Due diligence on the business usually takes the most time, so it helps to start talking to lenders early.
Tell us about your deal
Tell us a little about the business you're looking to buy. We'll review your requirements and get back to you.
We store and process this information to respond to your enquiry. Privacy & Cookies
This guide is general information, not financial advice. All finance is subject to status.