Ways to Buy Existing Business with No Money

Starting a business enterprise from a scratch can be  a herculean task as it requires much work and finance. Starting and nurturing a new business comes with high risks. Data from Silicon Valley reveals that more than 50 per cent of startups don't survive first 5 years.

However, buying an existing company can offer you great benefits. It saves you the stress of setting up a business such as feasibility study, writing of business plan, business incorporation, obtaining of necessary licenses and approvals, staffing and many more. Staff already familiar with the company and how it works can help you get started faster. You can leverage on what has been learned from past successes and failures to your advantage. 

Despite numerous benefits of buying an existing, it requires a much more capital than what is required to start up a new business. This becomes a constraint and discouraging factor to potential investors who are willing to buy existing business.

In this article we will show you can navigate your way and buy existing business without money. This sounds incredible, right? The lack of cash at hand will not necessarily keep you from buying a business if you follow guideline in this article. 

Banks have been setting stringent requirements for their commercial lending for some time now especially the need for acceptable credit collateral, but then, there is still funding available to purchase any company without using your personal fund.

Here is how you can buy a business company without making down payment

Figure out what kind of business you want to do

The first thing is to decide what type of company you want to have. You may have options. This will give a clear vision on where and how to search for such business and prepare yourself on how to make an offer.

Identify potential investors in such business, and other sources of business fund available for the kind of business. Prepare yourself on how to source for funds through these means.  It would be fantastic if you come up with an excellent presentation to explain to potential investors why investing in your company would be a good idea. It would help if you thought about what you want to achieve in the short and long term and make sure that your deck explains this clearly.

Look for companies that are up for sale. Find one that you can afford.  Find out what the company is doing and how it makes money by looking at their financial statements. Carry out industry research. That is finding out what other companies are doing, the market size and the level of competition. You can contact industry experts for advice on running your own small business successfully with little cash flow coming through yet still taking some risks if necessary because there’s always going to be uncertainty when taking over a business operation.

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How to Buy a Business without Using Your Money

  • Get business financing loan
  • Look for investors (partnership, Venture capitalists)
  • Use installment payments arrangement
  • Work for equity in the company
  • Use lease-to-own arrangement
  • Use crowdfunding 
Get Business Financing Loan

Your first option is buying an existing business when you don't have the capital is getting business loan. You have to consider different and available loan sources for the type of business. You can get loan from financial institutions like banks. Banks are usually willing to give loan for an existing business than to a startup. 

Look for Investors

If you can’t get a loan to finance the whole project, involve other investors interested in your business. This is one of the best ways to grown, expand and sustain a business. All you have to do is to sell part of the company to the investors. Owning a company does not necessarily mean owning it 100%. It’s good to bring in people who have the money, the skills and the connections to grow your business. You can bring in investors under partnership agreement or venture capitalists.

Venture Capitalists

Venture capitalists are willing to invest startups with potentials. Getting funding from venture capitalists is way easier than getting loan from banks, and it’s also cheaper. Venture capital adopts profit and loss sharing model, while in bank loan you must pay back the capital and the accrued interests whether the business succeeds or fails.

Venture capitalists invest huge sums of money in emerging or expanding companies with tremendous growth and traction potential, and typically invest much more capital than any other sources of funding except capital markets.

Venture capitalists take an equity position within the company to assist it perform a promising but higher risk project. So the they do not only bring in money, they also bring expertise.

Work for Equity in the Company

The concept of working for equity is one of the easiest ways to buy a business without money.

Lease-to-Own Arrangement

Hire Purchase is form of asset finance that allows businesses to spread the cost of a particular asset over a period of time. An asset finance provider agrees to buy the asset for the business directly against a down payment, typically 10% of the purchase price. The entrepreneur must then repay the remaining value of the asset on regular installments with a final payment at the end of the lease term. After this final payment, the entrepreneur takes ownership of the asset.

Use Crowdfunding

Another way to buy business when you don't have your own money and couldn't get finance from financial institutions or didn't want from them is to use crowdfunding to raise capital. It could either be equity crowdfunding or debt crowdfunding. 

Equity crowdfunding is a type of crowdfunding where the investors get share of the company in return to their investments. Why in debt crowdfunding you pay back the fund raised with interest at agreed rate and duration.


You can see that it's possible to buy an existing business with making down payment with your own money. If you are interested in owning an existing business, go out and the the opportunity utilizing any of the above list means of financing transactions.

Ikechukwu Evegbu

Ikechukwu Evegbu is a graduate of Statistics with over 10 years experience as Data Analyst. Worked with Nigeria's Federal Ministry of Agriculture and Rural Development. A prolific business development content writer. He's the Editor, Business Compiler

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