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Buying a business

Business buying programmes and acquisition mentors: what a lender still needs

A business buying programme can teach you the process. It cannot lend you the money. What these courses offer, and what a lender still needs from you.

Reading time 5 min read
Category Business guides
Written by The bizbritain team
A business buying programme can teach you how to find, value and negotiate for a business. It cannot lend you the money. Before you pay for a course or an acquisition mentor, know what a lender will still ask for: experience in the sector, money of your own and a profitable business to buy.
This guide is for someone planning to buy their first business and weighing up a paid course, mentor or group programme. It explains what these usually offer and what they cannot do. It also lists the questions to ask before you pay.

Section 01

What a business buying programme usually offers

Programmes come in a few shapes. Some are online courses. Others are group programmes, sometimes called masterminds, with regular calls and a members' community. A mentor works with you one to one, sometimes on a live deal.

  1. Training

    How to search for a business, read its accounts and make an offer.

  2. Deal review

    Someone experienced looks at a business with you and points out the risks.

  3. Templates

    Letters to sellers, heads of terms and due diligence checklists.

  4. Community

    Other buyers to compare notes with, and introductions to advisers.

That can be useful. Buying a business takes months, and most people only do it once. Someone in your corner who has done it before can save you from an expensive mistake.

Section 02

What a course or mentor cannot do for you

A programme cannot fund the deal. Whatever course you took, a lender makes its own assessment of you, the business and the price.
Myth 01

“Finishing a course makes a lender more likely to say yes”

A lender may be glad you understand the process. It will not lend on the strength of a certificate.

It looks at the accounts of the business you want to buy. It looks at your experience in the sector, and at how much of your own money goes in. A course can help you prepare those. It cannot replace them.

The numbers still have to work.

Be careful with any promise that you can buy with no money of your own. Some deals do use money left in by the seller. Our guide to buying a business with no money down explains how those deals work and what they cost you instead.

Section 03

Questions to ask before you pay

Programmes vary a lot in what they include and how they charge. Ask these questions before you sign up:
  • What exactly is included? Ask how many calls, deal reviews or hours with a mentor you get.
  • What does it cost in total? Check for any fee that becomes payable when you complete a deal.
  • Can you get a refund? Ask what happens if the programme does not suit you.
  • Who gives the live deal support? Legal and tax advice should come from a solicitor or an accountant.
  • Is the programme linked to any business, broker or lender it recommends? If it is, you should know.
Get the answers in writing. A good programme will be happy to give them.

Section 04

How do you get a loan to buy a business as a first-time buyer?

A lender wants to know that the business can repay the loan after the seller leaves. It also wants to know that you can run it. For a first-time buyer, that usually comes down to four things.

  1. Experience in the sector

    Lenders want to see that you have worked in the same industry, ideally at a senior level. For many acquisition lenders, this matters as much as the numbers.

  2. Money of your own

    Expect to put some of your own money into the deal. A seller who agrees to be paid part of the price later can reduce how much you need on day one.

  3. A profitable business at a sensible price

    The lender reads the recent accounts. The profits have to cover the loan repayments with room to spare.

  4. A plan for the handover

    Set out how you will take over the customers, staff and suppliers. Say whether the seller will stay on for a while.

A programme can help you get these ready. But the lender reads your track record and the accounts, not your course notes. What makes a first-time buyer fundable? Our help page on getting a loan to buy a business if you have never owned one sets it out.
When you have a business in mind, talk to an acquisition finance broker. A broker can look at the deal across a wider range of lenders. On advisory deals we take no commission from lenders, and you pay us nothing unless a lender on our panel issues an agreement in principle.

This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.

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