Dan Peters - Director, Edgeview Finance
Most Queensland owners I meet have a rough plan for the end of the road: sell to a manager, sell to a competitor, hand it to family. The books are clean, and the assumption is that a fairprice will find a buyer. That is usually where the thinking stops.
It is the part after that which catches people out. A buyer who agrees your price still has to fund it, and that decision sits with a lender neither of you has met. One of the first questions a business broker puts to a buyer is whether their finance is approved or available. Your exit plan depends on someone else's loan approval.
A business purchase is not weighed the way a property purchase is. Buying a warehouse, a lender is looking largely at bricks and mortar. Buying a business, the value is spread across plant and equipment, cash flow, customers, systems, reputation, intellectual property and brand. Some can be valued on its own; much of it only has value while the business keeps running. So lenders weigh the whole picture: the numbers, how the business runs, how much it leans on the owner, the merits of the deal, and whether the buyer has run something similar before.
That sounds like bad news. Usually it is not. A business purchase is rarely funded one way. Term debt is typically the backbone, with a mix layered on top: equipment and asset finance against plant and vehicles, debtor finance against invoices already issued, trade and inventory finance, and vendor or equity finance where a seller or a partner leaves money in. The mix is where these deals get done.
It is not a formula. Acquisition finance is scenario-based. A lender can give an indicative view early, but what is available comes down to the particular business, and two companies of similar size can be treated quite differently.
That is worth understanding before you sell, and it is the same view a buyer needs. I have written a short explainer on how lenders assess a business purchase, and I am happy to send it to anyone who wants one. If you would rather talk it through, a Finance Readiness Check is a straight-forward conversation about where you stand.
