When it comes to finance and buying a business, there are several variables which should be taken into consideration. Approaching such matter requires, in fact, a properly set up plan, especially if the owner’s intentions are related to franchising the business or cover this initial loan with future investments (this is mainly related to startups). Let’s analyse how to properly set up a plan for your initial business development.
Understand Your Market
In order to evaluate which type of loan will be required for you to finance buying a business, it’s important to evaluate either the competitiveness of your market’s niche and how big your competitors are. If, in fact, you will decide to go full throttle with a massive loan, in the beginning, chances that your competitors (who are already established within such field) will crush you are pretty high. An honest assessment will help you with your future decisions.
Consider A Startup Loan
If you’re planning to buy or start a business in tech (especially), a startup loan could be a winning choice for you, given the fact that, after a small evaluation, you will be able to get from £500 to £25.000, which (given such amounts’ flexibility) could definitely kickstart your business growth right before hypothetical investors could approach you.
The EFG Scheme
If you want to finance buying a business, you are based in the UK and your turnover is less than £41 million, you could join the EFG Scheme. EFG stands for Enterprise Finance Guarantee and it’s mainly made for those who weren’t able to pass other finance processes due to bad credit, track records or security. Although very simple in terms of planning and execution, the EFG scheme requires proper digging from the provider into your business idea and your credit check, in order to actually confirm your eligibility.
Finance buying a business in 2019 is definitely easier than how it was a couple of years ago, given the easiness of many online based portals which could estimate your loan, credit score and everything in between in a matter of seconds.