Found the right business to buy? Don't lose it waiting on a bank.

The problem with buying a business on bank finance

When a good business comes up for sale, the vendor usually has more than one interested buyer. The one who can show funds and settle on a firm date tends to win. Bank acquisition finance works against that. Banks want the vendor's financials, your financials, a business plan, often a valuation of the business and property, and a credit check. Approval can take up to three months or more, and even then the bank may not lend the full amount you need.

Meanwhile the vendor is fielding calls from other buyers, the broker is pushing for an unconditional contract, and you are trying to keep your current business or job running. Plenty of buyers lose the deal not because they couldn't afford it, but because their finance couldn't keep up.

How Equity Tap funds a business purchase

Equity Tap is a direct, independent private business lender. We lend our own money, from $50k to $5m, for one to twelve months, secured by a first mortgage, second mortgage or caveat over residential or commercial property anywhere in Australia. The security is the property, not the business being bought, which is why we can move without months of due diligence on the target's books.

We don't order a valuation before approval, and for a property-secured loan we don't need tax returns, BAS, profit and loss statements, an accountant's letter or bank statements. We need ID, property and existing mortgage details, the contract or heads of agreement for the purchase, and evidence of the exit.

Common ways buyers use the loan:

• Full purchase price where you have enough property equity, with a refinance to a bank once you own and trade the business.
• Gap funding alongside bank finance that came in below the price, or that is approved but won't settle in time.
• Stock at valuation and working capital on top of the goodwill, so you don't start day one short of cash.
• Deposit to secure the deal while longer-term finance is arranged.

A typical timeline

1. Before you sign: call 1300 123 024 and walk us through the deal, the price, the property you can offer and how you'll repay.
2. Same call: conditional approval can often be given on the phone, and a term sheet issued in about 30 minutes once we have the scenario. You can negotiate with the vendor knowing your funding position.
3. Contract: sign with a settlement date that suits you, not the bank.
4. Settlement: eligible loans can settle in as little as 24 hours once documents are in order.
5. After you take over: trade the business, build the track record, and refinance or repay on the agreed exit.

Keep cash flow free in the first months

The first few months of owning a business are when you need cash flow most. Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments while you settle in, meet the staff and the customers, and learn where the money comes from. Interest is not waived, but it isn't draining the operating account during handover.

Planning the exit

Short-term finance only makes sense with a clear way to repay it. For business purchases, the usual exits are:

• A bank refinance once you have trading history in your name.
• Sale of a property, such as an investment property you were already planning to sell.
• Sale of surplus equipment or stock acquired with the business.
• Business cash flow where the purchase price is modest relative to profits.

We agree the exit with you before funding and make sure you understand the loan, the costs and the timeframe. If you are also buying out an existing co-owner rather than a third-party vendor, see our business partner buyout page.

For example

For example, a mechanic running a workshop wants to buy a second workshop across town from a retiring owner. The bank says it will consider the deal after reviewing two years of the vendor's accounts. The vendor has another buyer ready. The mechanic offers a second mortgage over the family home behind the existing home loan, signs the contract with a short settlement, and plans a bank refinance after twelve months of combined trading.

Buying the premises too?

If the deal includes the freehold, or you want to buy the building the business operates from, see commercial property purchase funding. We can often fund the business and the property together. Our guide to fast finance for buying a business covers the process in more depth, and the equity calculator gives a quick sense of what your property could support.

Brokers

Business acquisition deals live or die on timing. Send your client's scenario through our broker page for a fast indicative answer, and keep the bank refinance for later.

Secure the business

We are business owners lending to business owners. Each loan is priced on the client's individual circumstances, aiming for the sharpest rate available for that situation, with the full cost shown before you proceed. Apply online or call 1300 123 024.

Business-purpose lending only. Approval, timing and terms depend on the scenario.

Frequently asked questions

Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.