How To Buy A Business With No Money?

Most people desire to quit their day jobs and go into business ventures. The biggest huddle to their dreams is that they may have little or no savings at all to fund the ventures. That has been a dream crusher for many.

Does having no money have to be an end of the road for your dream of owning a business? Can you own a business when you absolutely have no money? The answer is yes, it is possible to own business even if you have no money. The secret is to buy an already existing business instead of starting your own. This article will help you know how to buy an existing business with no money.

How To Buy A Business With No Money
How to buy a business with no money

Buying an already existing business has many benefits which already include an established market segment and experienced staff. You have an idea of what awaits you when buying an existing business as opposed to starting a new one. You will have an idea of the income, have an existing customer database and it may have established itself in the market.

Be cautious though and ensure that the clients are not tied to the owner and will exit with him and that the venture will be profitable for years to come.

Read here: How to build a business that lasts 

Reasons why you may not have money to buy a business

There are various reasons why you may not have money to commit to the purchase of a business. They include;

  1. Bad credit reports
  2. The money is already tied in other investments
  3. Little money and savings to even make a down payment to the purchase of the business.
  4. Skeptic about putting money into that particular business.  

Here’s a guide on how to buy a business with no money;

 Scout out for your ideal business

 It is important to think about which type of business you’d like to get into. Perform an analysis on yourself, noting down what your strengths are, what business you are interested in and if it is profitable enough to take the risk for. After that, scout around for which businesses are ready for a takeover. The owners may be looking to venture elsewhere or simply want to retire after years in the business. The easiest way to scout is to talk to accountants, business lawyers and even business owners themselves. They may have referrals. 

Timing is everything 

The right timing could unlock tremendous success in your quest to be a business owner. The right time is always when the current owner is ready to take a bow and exit the stage. This could be due to retirement, economic recess or other reasons. While economic recess is a risky gamble, it could work to your benefit especially if it is short-term.  

Have a business attorney

Just like when buying a business with your money, you need a properly structured deal when buying a business with no money. For this, you will need an attorney who has a specialty in business consultancy. Everything that can go wrong will go wrong if you opt for a general purpose attorney.  

See if there’s an option for seller financing

Some business owners may be willing to loan you the money needed to purchase the business. The seller financing option can however turn out to be a double-edged sword. It could mean that the owner sees potential in your entrepreneurial ambitions or believes in the business but just wants a time out. It could also mean that the business has a limited market and the owner just wants to liquidate. You should carry out due diligence to ensure that you are not being used as a bail-out for a desperate business owner.  

Make an enticing offer

 The owner may be reluctant to agree to seller financing, but that does mean that you should just give up. Try to sell them in on the idea. Make counter offers such as higher interest rates on the repayment plan, higher payments for a given period of time and working for free for a given time with all the profits going to them. Some would just like to retire and rest while still earning an income.  You can also make them passive investors in the business which will see them earn a portion of the profits. The difference between this option and owner financing is that repayment depends on the success of the business and you won’t be in debt per se.  

Find other sources of funding

To be honest, it is very unlikely that an owner will agree to the seller financing or passive investor options. You will therefore need to source for funds to facilitate the takeover. You can try bank loans or unsecured loans from family and friends.  If you opt to go for loans, secured or unsecured, you should be ready to be asked for a personal guarantee that the loan will be repaid. You should have a well-detailed business plan showing how the business will meet its loan obligations and in the event of unsercured loans, a back-up plan if it doesn’t.

Take your time to carry out extensive research on the business and its industry. Tweak the business model, but within legal confines, to improve profitability and ensure loan repayment.  

Bring on partners

You can onboard a partner who will contribute to the purchase of the business for a share in the profits. If your partner has the needed funds but lack expertise in the running of a business, you can make them a silent partner with no active role besides injecting money into the business.   

Are you purchasing the business’ assets or the business itself?

 If you are only buying the assets tied to the business, you will not be liable for its existing loans. If you are purchasing the whole business, including its liabilities, then you will need to factor its existing loans too. This will be important when making decisions such as the value of the business and your repayment schedule.  

Have some money left for other expenses

You will need money for other expenses such as legal fees, budgeting purposes and working capital. Factor in all these costs before making an offer for the purchase of a business. You shouldn’t be left with empty pockets after the offer is executed.

 You will need to keep the business going by paying rent or land rates, salaries and other utilities. You can get further financing from secondary sources or let the business’s assets and income generate the needed capital.

Instead of purchasing equipment, it is always cheaper to go for lease agreements. This is essentially useful for the must-have equipment that would cost an arm and a leg. You can also campaign for the lease agreement to be structured in such a way that you can buy the equipment at the end of the lease period at a discount.  

Use already existing cash inflows

The business’s cash flows can be the supply for its working capital. It saves you from having to sink deeper into more loans. Have a clear analysis and projection of the cash flows to be able to know how long it can keep your working capital going. Hire the services of a professional if you have to.  

Generate income from existing assets

You can always sell or repurpose the business’s existing assets and equipment. Make an assessment of the current business assets and the potential value they could add to the business. Unused equipment can be auctioned off and vehicles hired out. This is only possible if the assets aren’t acting as security to the seller.   

Take additional loans or refinance

If you are unable to raise working capital from everything else, it is time to consider taking out an additional loan, for example, an inventory loan. The problem with inventory loans is that banks usually have difficulties offloading repossessed inventories and are therefore quite reluctant to issue inventory loans.  

Try Pay on Performance agreement

This may be the best way to make sure that the business works out for you. Pay on performance agreement is an arrangement in which the parties perform periodic benchmarks, say between a 1-year and 5-year period, and you only pay the owner when the set standards have been met. The benchmarks are mostly based on revenue generation. The total amount of money paid out on these benchmarks are usually capped at the agreed price of purchasing the business. 


There will always be business owners looking to hand over the business to someone else. This does not however mean they want to see years of hard work go down the drain in a matter of months. They want the business taken over by creative and enthusiastic entrepreneurs who will keep their legacies alive for years after they leave. With the right skills and a systematic approach, you can own these businesses even if you have no money. 

Finally, always ensure you maintain good financial health, both as an individual and as the business. The headache starts after the acquisition and if you lack monetary discipline, that will be the beginning of your troubles. It is important to also keep your credit score high as you may need to look for more loans to expand the business.


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