How to Fund a Business Purchase
There’s a growing buzz around the idea of buying businesses, and for good reason.
You don’t need to reinvent the wheel to build wealth. You can buy a “boring” business that already generates cashflow, and grow it into something extraordinary.
At Vesta Finance & Advisory, we’ve seen a noticeable increase in enquiries from people looking to do just that. Some looking to break from the 9-5, others are business owners looking to grow through strategic acquisition.
We love it, because I truly believe business ownership is one of the most powerful (and often underrated) ways to build long-term wealth.
Yes, it’s hands-on. Yes, there’s risk. But done right, it can be a game-changer.
Why Buy an Existing Business?
Buying an existing business can offer a significant head start over launching something from scratch. Here’s why more people are taking a closer look at this path:
Cashflow from day one – You’re stepping into a business that already makes money
Established client base – You get existing customers, supplier relationships, and brand recognition
Staff and systems in place – Often with documented processes, tools, and routines
Potential to improve – Many businesses are under-optimised, offering room to grow through better marketing, tech, or strategy
Favourable demographics – Around 50% of business owners in New Zealand are over 50, which presents opportunity as more look to exit or retire
For the right buyer, it’s a powerful combination: stable foundations with the potential for exponential growth.
So, How Do You Fund a Business Purchase?
There’s no one-size-fits-all answer, it depends on the business itself, your financial position, and how the deal is structured. But there are a range of funding tools that can help you secure the right opportunity.
Here are some common options:
Cashflow Lending
Also known as an unsecured business loan, this funding is backed by the earnings of the business rather than hard assets.
Rule of thumb: Many lenders will offer up to 3x EBITDA (earnings before interest, tax, depreciation, and amortisation). The stronger and more stable the cashflow, the more likely banks are to support this structure.
Equity Release
If you have equity in your home or another property, you may be able to access that capital to fund the business purchase, sometimes up to 100%. This is a common option for first-time buyers or professionals looking to branch out.
Asset Finance
If the business has physical assets, think vehicles, machinery, or equipment—these can often be financed separately. As a general rule: if it has a serial number, it might be financeable.
This can reduce the upfront capital you need to inject and keep your working capital free for growth.
Vendor Finance
Also known as a "seller loan", vendor finance means the seller agrees to lend you part of the purchase price. This can help bridge funding gaps and shows the seller is confident in the business’s ability to continue performing.
It’s becoming increasingly common, especially in SME acquisitions.
Partner or Investor
Bringing in a co-investor, whether active or silent, can be a great way to strengthen your offer or support a larger acquisition. This might be a business partner, investor, or even a family trust, depending on your goals.
Due Diligence Is Key
Buying a business is a big decision. It requires a thorough understanding of the numbers, risks, and opportunities, plus a sound funding strategy to support your plans.
At Vesta Finance & Advisory, we’ve helped countless clients assess, structure, and fund business acquisitions. We’re here to guide you through the process, help you avoid common pitfalls, and make sure your funding stack works for the long term.
Ready to Explore an Opportunity?
If you're looking at buying a business, or even just considering it, feel free to reach out.
We can help you:
Understand your borrowing options
Review the numbers and business case
Connect with trusted advisers for legal, tax, and due diligence support
Structure a funding solution tailored to your situation
Business ownership could be one of the most powerful moves you make. Let’s make sure you’re set up to do it right.
This article is for educational purposes only and is not personalised financial advice. Buying a business involves significant risk and requires careful due diligence. Ensure you have an experienced team of advisors.