If you want to buy a company, you need capital. A lack of start-up capital is still one of the main reasons for failure. It is all the more important to know about alternative financing options. You are currently looking to buy a great company and are faced with the challenge of having found a smart idea, but not having the capital or a large network to implement the purchase. We’ll show you 3 ways how you can get money and finance your company safely.
1. Buy a company with little equity
In the first case, we assume that you have saved at least a little something. A rule of thumb says: if you want to buy a company, you should include 15 to 20 percent of the purchase price Equity finance. The rest can be done through so-called Subsidiary chapter cover. If external investors support you without asking for the usual collateral, this is called venture capital. Incidentally, long-term participation strengthens the basis for negotiating bank loans.
On the one hand, investors can be private contacts such as parents or friends or private equity companies, family offices or any other medium-sized holding companies. There are also numerous grants from the individual federal states. Here you can give it a try and get a start-up grant.
2. Buy a company without equity: mezzanine capital
Mezzanine is a hybrid of equity and debt. We noticed that banks rate it like equity and it adds to your creditworthiness. In contrast to the first approach, it differs in that you only receive outside capital, but it is rated like equity capital.
One expression of this is silent participation . In the case of a silent partnership, the lender pays a contribution without receiving shares. He participates in the profits, but not in the assets. On the other hand, he does not interfere in the management and does not appear externally.
Another expression is that Seller Loans . When part of the purchase price is converted into a loan from the seller, it is called a seller loan. It is then negotiated like equity and creates trust in the company because someone has already invested.
There are also numerous Funding programs from the federal government, states, municipalities and also the EU, which provide money for the purchase of a company under certain conditions. One example is Kfw, which offers many such programs.
3. Buy a company without equity: Borrowed capital
Borrowed capital is the name given to the company’s reported debts. So you can, for example, a Bank loan record, tape. Above all, it is important to plan ahead of time. Banks want precisely calculated business plans in order to get an idea of the future opportunities of the company under your leadership.
Another option are Personal loans which often offer more leeway. Investors are usually family, acquaintances, customers, business partners and private investors. So that there is no dispute, such loan agreements should always be written down.
There is still an alternative Promotional Loans . The KfW and the development banks of the federal states support company buyers with publicly subsidized, low-interest loans. This can also be an alternative for you. Just look at Google for such programs.
Conclusion: Buying a company without equity capital is possible
You see that there are alternatives for the venture: Buy a company without equity. With borrowed capital or mezzanine capital, you can buy a company without any problems. So it is worth looking for alternatives.
In order to get everything right from the start, it can also be worth asking a real expert for assistance. He can accompany you throughout the entire process. We have various services especially for this, such as for Purchase advice or to financing developed for you. Try it out now!
Now all you need is the right company. As a non-profit association, Projektify helps small businesses find a successor. So if you are considering this, then be sure to read our additional information Tips on How to Take Over a Business you can go through or try it out and look at our advertisements or post your web project with us for free !
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