Preparing for Business Buyer Finance in New Zealand

Buying a business often requires more than the advertised purchase price. A buyer may need funding for the deposit, working capital, stock, equipment, legal costs and a period of transition.

Prepare your own position

Document available cash, borrowing capacity, existing commitments, personal living costs, relevant experience and the amount of working capital you will retain. Avoid assuming every dollar of cash can be used for the purchase.

Prepare the target business information

Lenders and advisers may ask for financial statements, tax information, bank evidence, lease terms, customer concentration, staff costs, the proposed purchase structure and your forecast after settlement. The quality of the information affects how quickly questions can be answered.

Stress-test the deal

Model a slower first six months, higher interest, equipment replacement, staff turnover and a weaker trading period. Use a business valuation as one input, not as proof that finance will be approved. Talk to a lender and accountant early.