Creative Financing For Business Buyers
When buying a business you have limited capital, then you need financing. When one is financing a business, one needs to be creative and innovative. Finding the money to start or acquire a business can be tricky and tiresome but with these suggestions, you can find the money for your new business with relative ease.
It is the most common and easy way to finance the transaction. The bank prefers this method of financing as it proves the seller has invested interest and time in the company and will ensure its future success. In this scenario, the buyer would seek financing from the seller, usually paid with interest over a period of time. It’s a show of confidence on the part of seller in his/her business.
Canada Small Business Financing Program
This program is very helpful in financing up to $500,000 for any one small business. The financing is available for start-up business, renovation and expansion of established business in Canada. Any existing business with annual revenue of less than $5,000K is eligible for the program. Small Business Buyer can apply to any financial institution, bank, caisse populaire or credit union.
These are dollar amounts that the buyer and seller discuss as financing options. The buyer agrees to pay a specific amount based on the success of the company after the business has changed hands. This type of financing is usually based on potential and not existing profit structuring on annual revenue, gross profit and/or net income.
BDC Venture Capital
It is one of the biggest investors in Canada involving from very start of the venture, development and operation it’s operation. BDC Venture Capital invests in high profit and specific technological enterprizes
This is another possibility for small business. Angels are successful retired wealthy individuals who have expertise in technology, business administration, operation and/or business management. They generally finance from investment of $25,000 to $100,000 in early stages of the business specially in start-ups with their own terms and conditions including right supervision of business.
These are but a few of several ways to find money to finance your business micro loans from financial institutions, community loan funds that are not-for-profit organizations for helping people, start-up business financing from Business Development Bank of Canada etc.
Discuss with the Business Broker for the company you are thinking of buying about the possibility of seller financing or the other financing options.
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