Can I get funding to buy an existing business?

Yes. The most common way to fund a business purchase in New Zealand without a long bank process is a loan secured on property you or a supporter already own, which can cover the deposit or the whole price between $20,000 and $1m.

Funding to Buy an Existing Business in NZ: Your Options

Buying an established business — a cafe with regulars, a trade business with a full forward book, a franchise with a proven system — can be less risky than starting from scratch. The catch is funding it. Banks often want a large deposit, two years of the vendor’s accounts, a detailed business plan and weeks of credit assessment. Vendors don’t always wait.

Here’s how people actually fund business purchases in New Zealand, and how to set yours up.

How is buying a business usually funded?

Most purchases combine two or three of these:

Your own contribution — savings, or proceeds from selling something else.
A property-secured loan — equity in a home, rental or commercial property used as security, from $20,000 to $1m.
Vendor finance — the seller agrees to be paid part of the price over time. Not every vendor will, but it’s worth asking, and it signals the vendor believes in the business.
Bank acquisition lending — possible when the business has strong, well-documented profits and you have time.

Property-secured lending is often the piece that makes a deal work, because it doesn’t depend on the business you’re buying. The lender’s comfort comes from the property. That means goodwill — which lenders generally won’t take as security — can be funded without a fight, and the approval doesn’t hinge on getting the vendor’s accountant to produce reports quickly.

What will the lender want to see?

For a property-secured purchase loan, the initial assessment focuses on the property and the plan. No financials or tax returns are needed at that stage. You’ll typically be asked for:

The sale and purchase agreement, or a draft.
A short summary of the business: what it does, turnover and profit as disclosed by the vendor, number of staff.
Your background — have you run something similar?
Property details: address, ownership, current mortgage.
How the loan will be repaid: from trading profits, refinance to a bank after a year of your own accounts, or sale of another asset.

If you’re using unsecured funding for part of the purchase, bear in mind most cash flow lenders want the borrowing business to have been trading for 6+ months — which a brand-new purchasing company won’t have. That’s one reason property security is so common for acquisitions.

What should I check before buying?

A lender isn’t your due diligence team. Before the agreement goes unconditional, work through the basics with your lawyer and accountant. Business.govt.nz has a useful overview. At minimum:

The lease. How long is left, what are the rights of renewal, and will the landlord consent to assignment? A business with 14 months left on its lease is a very different purchase from one with 9 years.
The numbers. Two to three years of accounts, GST returns that match the reported turnover, and bank statements that back up both.
What’s included. Stock at valuation, plant and equipment, IP, customer lists, phone numbers and domain names.
Staff. Employment agreements, holiday pay owing and how it’s handled at settlement.
Security interests. Search the PPSR to see whether any lender has security over the business’s assets — they’ll need releasing at settlement.
Tax. Whether the vendor has outstanding GST or PAYE that could complicate things.

How much should I borrow?

Borrow for the whole job, not just the price. Buyers often forget:

Legal and accounting fees for the purchase.
Stock adjustments at settlement (often more than estimated).
Working capital for the first two to three months while you learn the business.
Early improvements — a refresh, new equipment, marketing.

Our guide on working out how much to borrow has a simple method for this.

Timing the finance with settlement

Put a finance condition in the sale agreement with enough time to confirm funding — your lawyer will draft it. Once the agreement is signed, a property-secured loan can move quickly: in some cases funds can be available within 24 hours of approval. The slower parts are usually outside the loan — landlord consent, vendor warranties, and transferring licences.

Let’s talk it through

Ring the Hotline with the business name, price and settlement date. A lending specialist will tell you what’s realistic and how to structure it before you commit. Or request a call back.

Other things people ask about this

Can I borrow the full price to buy a business?

It's possible when the loan is secured on property with enough equity, because the property rather than the business being bought carries the lending risk. Without property, most lenders expect a meaningful personal contribution.

Will a lender fund goodwill?

Lenders generally don't treat goodwill as security because it can't be sold separately from the business. That's why property security is so often used for acquisitions — it lets you fund the goodwill component without relying on it.

How long does acquisition funding take?

Allow time for due diligence and lease assignment, not just the loan. The finance itself can move quickly once the sale agreement is signed and the property details are confirmed, but settlement dates should allow for landlord consent and legal work.

Should the finance condition be in the sale agreement?

Usually, yes. A finance condition gives you time to confirm funding before the agreement becomes unconditional. Your lawyer will advise on the wording and the date.