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Loans to Buy a Business

Do you need a loan to buy a Small or Medium Size Enterprise and are based in the South West? If so, our UK Loans to Buy a Business could help you.

What is a Loan to Buy a Business?

If you’re looking to purchase a business in the South West, a business loan or a Start Up Loan from SWIG Finance could be part of your funding solution. Whether you’re seeking funding to buy an established business or a franchise, we have the experience and resources to help.

Our decisions are made by people, not computers, which means that we lend by looking at the bigger picture.

Our business managers provide support and guidance throughout the application process, and for the duration of the loan, to give our customers the best chance for success.

How to Get a Loan to Buy a Business?

To get a loan to buy a business, you will need to demonstrate to our SWIG Finance team that you have a solid business plan, relevant experience, and a robust cashflow forecast. As part of the assessment, the business you’re purchasing will also be assessed. Our Business Managers will ask for the financial accounts for the business and factor this into their overall assessment. You’ll also need to show that you have a realistic plan for how you’re going to repay the loan and this should be factored into your forecasts. At SWIG Finance, our team of experts will work with you to assess your needs and provide you with the right loan solution.

What to Consider When Buying a Business?

When purchasing a business, you will need to consider several financial factors. These include:

  1. Cost of the business: How much will the business acquisition cost you in total? Ensure that you include any licenses or fees for solicitors.
  2. The amount of working capital required to maintain and grow the business: You must consider the cost of maintaining the business for example rent or bills. You may also require capital for expanding the business, for example introducing new products or providing new services.
  3. The level of profitability of the business: Can you make a profit from purchasing and growing the business? If so, how much and how long before you see a return on your investment?
  4. Repayment terms of the loan: Can the business afford to make repayments according to the terms of the loan?
  5. Interest rates: Interest rates can be subject to change; can the business adapt to these changes?

How to Evaluate a Business you're Buying?

To evaluate a business you’re buying, it’s important to complete your due diligence on the financial performance of the business, this includes:

  • Revenue or Gross Income: This is the total amount of money made by a business over a set period. Expenses and costs are deducted from this to calculate the net income.
  • Profit Margins: This is the percentage that remains after you deduct the costs from the revenue of this business.
  • Cash Flow: This is a measure of the outgoings and income of a business on a month-to-month basis. This is used to monitor forecasted cash levels, plan strategic business decisions, and ensure the business has sufficient cash to meet its obligations.
  • Industry Trends: Look at the market values of the business and trends in the data from the market. Consider what the future of the industry’s market looks like.

It’s also important to consider the reputation of the business and its customer base, as well as its staffing levels, overheads, debts, existing systems and processes.

We would always encourage a prospective purchaser to take independent professional advice.

What are the Advantages of Purchasing an Existing Business?

Purchasing an existing business has several advantages over starting a new business from scratch. An existing business will typically have an established customer base, a proven track record, and a brand that is already recognised in the market.

Additionally, purchasing an existing business can provide a faster route to profitability, because you can take advantage of the existing infrastructure, processes, and established networks. In many cases, you will already have staff with experience in the different departments of the business. But before purchasing the business, consider the efficiency of this infrastructure as this may commonly require further investment if systems and processes are dated. Also, make sure that the outgoing vendor isn’t about to set up in direct competition.

Have you been trading for less than 3 years?

You could be eligible for a Start Up Loan; get in touch today!

Is my business eligible for a SWIG Finance Loan to Buy a Business?

SWIG Finance provides Loans to Buy a Business for South-West-based Limited Companies that have been typically trading for over two years. If your business needs finance to buy a business, you need to demonstrate that these new assets will help improve efficiency and/or enhance productivity.

SME loan eligibility criteria include:

  • You must be 18 or over.
  • Limited companies only can apply.
  • You must be a business with a clear plan for the purpose of the loan.
  • The business must be able to demonstrate viability and growth potential.
  • The business must be based in the South West of England.
  • Applicant businesses will typically have been trading for more than 2 years.

How much can an SME borrow from SWIG Finance?

SME Loans from £25,001 up to £250,000 are available.

What are the interest rates and fees?

For a business loan of £25,001 to £250,000 repayable up to 5 years, the interest rate is 12% ABR. 

There is a 5% arrangement fee at outset, which can be added to the loan. If any payments are missed or late there may be additional fees. 

    “We chose to work with SWIG Finance because, unlike other lenders, at SWIG you can talk to a person. Ultimately, SWIG Finance were able to support our business by looking at the bigger picture – something which other lenders are not willing to do.”

    Customer Testimonial, SME Business Owner

    Business Loans to Buy a Franchise

    We can support the purchase of franchises too, through Start Up Loans as well as our business loans.

    If you are already running a franchise business and are looking to expand into a new premises, a SWIG business loan may be the best fit. In these circumstances, a discussion with our Business Managers is a great starting point to ensure you focus your efforts on the right solution for your business.

    In conclusion, if you’re looking to become a business owner, then a Start Up Loan or a business loan from SWIG Finance might help you achieve your goals

    How to apply for a Loan to Buy a Business?

    To apply for a Loan to Buy a Business, you will need to complete our online application form.

    Information we will need to assess your loan request:

    • Last 2 sets of full annual accounts, including detailed Profit & Loss Accounts
    • Management accounts for the period since the most recent year-end to date
    • Cashflow forecast for a minimum of 12 months, identifying the loan requirement and showing spending
    • Agreement to Open Banking
    • Credit Report for all directors
    • Business Plan
    • Details of any agreed outputs e.g. number of jobs created or safeguarded

    Apply now to take the next step in securing the funding your business needs.

    Apply for a business loan now

    Please complete the below enquiry form and a member of the team will be in touch.

    Should you wish to apply for a loan then please complete the following questions:

    Here at SWIG Finance Limited we take your privacy seriously and will only use your personal information to administer your application and to provide the products and services you have requested from us. Please tick the box below to indicate your consent to us processing your data in accordance with our privacy policy.

    How can I get a loan to buy a South West business?

    To get a loan from SWIG Finance to buy a business you will need to provide financial accounts for the business you’re purchasing. Outside of this, you will need to demonstrate a solid business plan and cash flow forecasts. We will also need to see a purchase agreement.

    What factors should I consider when buying an existing business?

    When buying a business, you should consider the cost of the business, revenue, profit and required capital to maintain and grow the business. As well as considering the repayment terms for a loan, you should also consider the future of the market that the business operates in.

    How can I evaluate a business I'm buying?

    To evaluate a business you’re buying, you’ll need to do your due diligence. You should assess its financial performance, including revenue, profit margins and cash flow. You’ll also need to take into account the business’ current resources and assets, as well as its reputation and customer base. You should take professional independent advice before proceeding

    What are the advantages of purchasing an existing business?

    Purchasing an existing business has several advantages, including an established customer base, a proven track record, a recognised brand, established processes and infrastructures, and potential growth opportunities.

    Will I be eligible for a business loan to purchase a business?

    SWIG Finance supports businesses and entrepreneurs based in the South West. The eligibility criteria differ depending on the situation of the business you are looking to acquire; we welcome initial enquiries to establish suitability.

    Out of Wood

    SWIG Funding Package Supports Business Acquisition

    Case Study, SME
    Cornish furniture design company, Out of Wood, has received a boost of over £80,000 through SWIG Finance to support its growth plans under new ownership. The funding was made up of a Start Up Loan for each of the business owners, plus a SWIG Business Loan backed by British Business Bank’s Recovery Loan Scheme. Based in Truro, Out of Wood designs and manufactures bespoke kitchens and built-in furniture and has been trading for more than 20 years.

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