Malcolm ZoppiSun Oct 15 2023

How to Buy Business With No Money (Step-By-Step Guide To Seller Financing)

Buying a business is an exciting and sometimes challenging process.


Buying a business is an exciting and sometimes challenging process. It often requires a lot of money, which can be even more difficult if you don’t have the cash upfront to purchase the existing business or are unable to take out a hefty business loan. Fortunately, there are several options for buying a business with no money up front without having to sell your other assets.

This guide will provide business buyers with an overview of the steps involved in buying a business through various financing methods so that you can make an informed buying decision. We will also discuss the pros and cons of buying a business through seller financing and outline the potential risks to consider when buying a business with no money up front.

With this information in hand, you will be in a better position to decide if buying a business without your own money is the right choice for you. So, let’s get started!

Step-By-Step Guide

1.  Determine why you want to have your own business

As most business buyers will tell you, your commercial goals should be identified before searching for a suitable existing business that will help you meet these goals.

Are you buying a business to earn extra income? Do you want to increase your current profits by integrating an existing business with your own businesses? Do you have an online business but want to build a physical presence? Are you looking for a new challenge in life but don’t have the time or resources to start new businesses? Or do you just love making money? Maybe you have other reasons for buying a business?

You should also consider the impact on your personal life. Being the primary owner of a business requires a lot of time and effort, even for small businesses. You may have to accept a reduced salary initially, and so you need to be confident you can juggle the necessary commitment alongside other things in your life.

Clearly identifying at this early stage why you want to buy a business will help to keep your short and long terms goals targeted and focused, giving you the best chance of success!

2. Identify a suitable, existing business

Once you know why you want to buy a business, it is time to start looking for businesses that meet your needs and match your own skillset. You can research businesses online, attend business conferences and fairs, or use a business broker to help you narrow down your search.

Researching high growth businesses to buy in your area in your local area, for example, would give you an immediate advantage as you may be better placed to know the local customer base & suppliers, which business models work, and the local market trends which will enable you to tailor your marketing strategy accordingly. You may even have your own ideas about attracting new customers with your local knowledge!

It is important to do in-depth research of the potential business and its business model before buying it. Conduct financial analysis to make sure that your target is an income generating business; one that will generate enough money to cover its operating costs and business expenses. Analysing the financial statements, customer base, and other important business aspects in detail before making a decision is essential.

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And remember, always refer back to your initial goals we set at step 1 after conducting your research; does this business meet your current and longer term needs?

3. Understand who the current business owner is

Once you have identified a suitable existing business, you may already have your heart set on your new business venture and decide that you want to take the plunge ASAP. But hold up, there are other important considerations with regards to its current owner.

Are your objectives realistic and in line with theirs? How flexible are they to alternative financing arrangements? What are their their long-term goals, maybe they’re approaching retirement age and want out? How much control are they willing to relinquish?

Opening a constructive dialogue with the current business owner is key to moving negotiations forward smoothly for potential buyers so that everybody’s interests can be addressed. Additionally, knowing this information ahead of time can help simplify the negotiation process and streamline the purchase.

4. Propose seller financing

What is seller financing?

Seller financing refers to buying your own business with little or no money upfront and relying on the existing business owner to finance some or all of the purchase price. It is a great idea if you want to buy a business quickly but currently don’t have enough money yourself, are experiencing cash flow problems, or don’t want to be tied into riskier financing options such as a hefty business loan.

Small business owners, to those of a larger business, are often open to the idea of seller financing. You will be entering into an agreement for the seller to loan you the purchase price and you slowly paying them back over time, usually with profits you generate from the business.

Seller financing in the UK requires both parties to agree on the sale price, payment schedule, and interest rate. Negotiating these terms can be difficult, as it must take into account both your needs and the seller’s interests. It is important to make sure that the agreement you sign protects your rights as a buyer while respecting the seller’s wishes.

What are the benefits of seller financing?

This type of financing brings a significant amount of benefit, as it can massively reduce the amount of money you need to buy a business up front. Also, if a seller is open to this financial arrangement, it is a strong indication they are confident that the business is profitable, and that they believe you will make a success of it and be able to meet the repayments over the long term.

The drawbacks of a seller financing contract

On the other hand, there are risks associated with buying a business through seller financing. Firstly, the current seller may be integral to the success of the business. Without their involvement can you expect the business to remain as profitable?

Additionally, they may want to retain a level of control (for example, remain as a director), or stipulate that you cannot sell the business on within a period of time. You must check that any seller conditions align with your own plans. As such, it is important to weigh up the pros and cons before making any decision.

Navigating the seller financing contract process: What if the seller won’t loan me all the money?

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It should be noted that most sellers will be reluctant to hand over 100% of the business price. You may feel this is at odds with the title of this article, but fear not, there are options available for borrowing money.

If you are unable to fund any initial down payment out of your own cash, you can always look to a business loan from a bank, loans from family or friends or bringing in a silent partner, passive investor (or even venture capitalists!) to raise cash as alternative funding options to meet the entire purchase price.

Always seek professional advice!

Due to the complexity of buying a business, buying an existing business can be a time consuming and tedious process. For this reason, it is always advisable to seek the help of professionals for assistance. Business brokers and advisors are well-versed in buying businesses and can guide you through each step of the process. They will also be able to provide invaluable advice and contacts that can help facilitate the buying process.


To conclude, purchasing an existing successful business can be a great way to benefit from a proven business idea. Once you’ve identified the type of business you want to buy and where to buy it, you’ll need to give consideration to how to finance your acquisition.

You’ll find that most business owners choose to conduct a business acquisition through owner financing, a leveraged buyout, small business loans, or similar means without having to spend money from their own bank account.

By researching your options, understanding the seller’s motivations, and seeking professional assistance if needed, buying an existing business with seller financing can be a viable option for those wishing to become business owners without having to raise large amounts of money up front or take out hefty additional loans.

However, it is important to understand the risks associated with buying a business with no money, and ensure any agreement you sign is in your best interests.

Now you have read this article, you should be better informed on how to buy an existing business with no money via seller financing and what steps to take. Good luck in your buying endeavours!

Find out more!

If you want to read more in this subject area, you might find some of our other blogs interesting:

Disclaimer: This document has been prepared for informational purposes only and should not be construed as legal or financial advice. You should always seek independent professional advice and not rely on the content of this document as every individual circumstance is unique. Additionally, this document is not intended to prejudge the legal, financial or tax position of any person.

Comprehensive provider

Get the specialist support you need

Whether you require specialised knowledge for your business or personal affairs, Gaffney Zoppi can support you.