Perhaps you’ve were browsing through a business magazine came across an article about “buying a business with no money.”  If you’re like me, your first thought was to ask if the article was real, or just some phony advertising ploy.  After all, who ever heard of buying a business with no money?  But when you think about it; it’s really not much different than buying a car or a house with no money down.  And these days, there are plenty of anxious sellers out there who will try to help you avoid a cash outlay if that’s what it takes to make the deal. 

Don’t let the concept of “no money down” scare you; financing the entire transaction with a bank loan is nearly impossible anyway.  If you are serious about buying a business with no money, you will need to do a combination of seller-assisted financing, bank loans, venture capital and bank financing.  Some entrepreneurs are able to find a grant to pay for part of their new business, but this is relatively rare.  For buyers with a decent credit history, financing rates are at historic lows, which make it even more tempting to finance the whole transaction. 

However, there are some experts out there who disagree with the idea of buying a business this way, especially if you plan to “flip” the business in a short period of time.  Many banks will require that the owner operates the business personally for a certain length of time before approving a small business loan.  Before a bank will lend out any money for a business, they must first be convinced that the owners are in it to win it, and that they know how to run a profitable business. Not every new business will warrant this type of financing from a bank. 

If you’re one of those savvy entrepreneurs with the “Midas touch,” then you may be able to pull together enough financial resources for buying a business with no money.  Government initiatives, tax incentives, SBA loans and investor financing are all a great way to get the money you need to buy a business.   There are some businesses that promote the fact that they are offering assistance with financing.  In fact, most franchisors have longstanding relationships with a specific bank.  This bank is there to help in funding the purchase of new franchise locations. 

Curious about buying a business with no money down?  Still looking for the right business opportunity?  Read this article from BizSale.com (“Buying a Business with No Money – Is it Possible?”) and find out more.

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