Buying a business
Working capital after buying a business: how to fund the first 90 days
Working capital after buying a business pays for stock, wages and bills before customers pay you. How to plan the first 90 days and fund them with the loan.
Working capital after buying a business is the cash you need to run it from the day you take over. It pays for stock, wages and bills before your first customers pay you. Buyers often fund the price in full and leave this short. A 90-day cash plan, agreed with your lender before completion, closes that gap.
Most buyers budget for the price. Fewer budget for the first payroll.
Section 01
Why cash gets tight straight after completion
A business can be profitable and still run short of cash in its first weeks under a new owner. The money going out starts on day one. The money coming in takes longer.
Here is why that happens:
- Customer debts may stay with the seller. On an asset purchase, money owed for sales made before completion often belongs to the seller unless the deal says otherwise. Your own first invoices can then take a month or more to turn into cash.
- Supplier terms can reset. A supplier who gave the seller 60 days may want a new owner to pay on order until you have a record with them.
- The first payroll is yours. Staff who move across with the business are paid by you from the first pay day.
- Stock may need topping up. Sellers often run stock down before a sale, so you may need to buy more straight away.
- Seasonal dips do not wait. If you complete just before a quiet month, sales fall while your costs stay the same.
On a share purchase the company keeps its own customer debts and supplier accounts. But the price is often set on a normal level of working capital. If the seller leaves less than that, you start short. Our guide to asset sales and share sales explains the difference.
Section 02
What the latest survey says about cash flow
The pressure is not only on new owners. According to the British Chambers of Commerce, more firms saw cash flow fall than rise in the three months to mid-September 2026.
29%
22%
47%
17%
The survey covered over 4,300 businesses, most of them small and medium-sized. So many firms expect to sell more, but have less cash to fund the work. A business you buy may be in the same position.
Section 03
How to work out working capital after buying a business
Build a 90-day cash plan into the deal, and write it before you agree the price. It shows you how much cash the business needs, and it shows a lender you have thought about it.
List every payment due in the first 90 days
Include wages, rent, a VAT quarter, loan repayments and any supplier bills. Put each one in the week it falls due.
Work out when customers will actually pay
Use the seller's real payment record, not the terms on the invoice. Late payers make the gap wider.
Ask the seller what does not show in the accounts
Check for customer deposits already taken, supplier credit that may not transfer and seasonal swings. Each one changes your cash in the first weeks.
Find the lowest point
The week your bank balance dips furthest is the number that matters. Add a margin on top for anything that runs late.
The lowest point tells you how much working capital to arrange. It also tells you whether you are borrowing too much for the purchase itself.
Section 04
Facilities that sit alongside the acquisition loan
The loan that pays the seller is usually a term loan. It is repaid over several years. Working capital needs something that can go up and down with the business.
The usual options are:
- An overdraft or revolving credit facility. You draw what you need and repay it as cash comes in.
- Invoice finance. A lender advances most of the value of your unpaid invoices, so you do not wait for customers to pay.
- Stock or trade finance. This pays suppliers for stock up front, and you repay it once the goods are sold.
Lenders usually want to see these arranged before completion, not after. A buyer who runs out of cash in month two is a risk to the whole loan. So the working capital facility is often agreed in the same package as the acquisition loan.
Keep the full cost in view as well. Our guide to what acquisition finance costs covers the fees and how the structure changes what you borrow.
Section 05
What the lender wants to see before you complete
A lender looks at whether the business can carry its new debt and still pay its bills. Your 90-day plan is the clearest answer.
Expect to show the cash plan, the seller's recent accounts and management figures, and your own money going into the deal. The lender may also ask how you will handle a slow month.
If you are planning a purchase, talk to an acquisition finance broker before you agree the price. We can look at the purchase and the working capital together. You pay bizbritain 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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