Finance to buy a business, a franchise or a partner's share

Buying a business that already trades is one of the quickest ways to grow, but the finance often lags behind the deal. A vendor wants certainty, a settlement date is set, and the bank wants another month to review the numbers. Here’s how New Zealand buyers bridge that gap.

What acquisition finance covers

• Buying a whole business: the goodwill, plant, stock and customer base.
• Buying a franchise: the franchise fee, fit-out, initial stock and working capital.
• Buying out a partner: paying a co-owner for their share so you own the business outright.
• Buying a competitor: acquiring a rival’s customers, premises or equipment.
• Buying premises with the business: where the freehold is part of the deal.

What lenders look at

Acquisition lending has two sides: the business you’re buying and you as the buyer.

The business:

• Two to three years of financial statements and recent management accounts.
• GST returns that support the reported turnover.
• The lease: remaining term, renewal rights and assignment terms.
• Key customers and contracts, and whether they transfer.
• Stock and equipment lists.

The buyer:

• Experience in the industry, or a credible management plan.
• Your own contribution: cash, property equity or other assets.
• Personal credit history.
• How you’ll repay: the business’s cash flow, plus any other income.

The fastest routes when settlement is close

Using property equity

The most common fast route is to borrow against property you already own: your home, an investment property or commercial premises. Because the lender relies on the property, it doesn’t need to fully analyse the target business before settlement. A first mortgage or bridging loan can settle in days, with up to $5m possible within 24–48 hours once the file is complete.

After settlement, with the business in your hands and its accounts accessible, many buyers refinance onto a bank loan on longer terms.

Vendor finance

Some vendors agree to leave part of the price owing, repaid over time from the business’s earnings. That reduces how much you need on day one and shows the vendor’s confidence in the business. Lenders often view vendor finance positively, but it needs to be properly documented by lawyers.

Bank acquisition finance

Banks lend against the target’s history and can offer longer terms. They’re the right long-term home for many acquisitions, but rarely the fastest. Starting the bank conversation early, in parallel with a faster interim option, gives you both.

Due diligence still matters

A fast settlement should never mean skipping due diligence. Before you sign unconditionally:

1. Have your accountant review the financial statements and GST returns.
2. Have your lawyer review the agreement, lease and key contracts.
3. Confirm the lease can be assigned and what the landlord requires.
4. Check for registered security interests on the PPSR over business assets.
5. Understand any staff entitlements that come with the business.

The business.govt.nz guidance on buying a business is a useful checklist.

An illustrative example

A couple with hospitality experience agree to buy an established Ōamaru café and catering business for $480,000, with settlement in 14 days. The vendor has another interested buyer. Their bank is positive but wants a full review of three years of accounts and a lease assignment, which will take at least five weeks.

They own a home worth $950,000 with a $280,000 mortgage. A specialist lender provides a $480,000 bridging loan secured over the home, settled in time. Two months after taking over, with a clean handover and the business’s figures confirmed, the bank refinances the purchase onto a five-year business loan secured over the business and home, and the bridge is repaid.

Questions to ask yourself first

• Is the settlement date firm, and is there room to negotiate a few extra days?
• Can the vendor leave part of the price owing?
• What’s your long-term finance plan once the business is yours?
• Have you allowed for working capital in the first months, not just the purchase price?

Check how fast you can fund it

Our funding speed finder weighs your amount, settlement date and security to show what can realistically land in time.

Working capital after settlement

Remember to budget for the first few months after you take over: stock top-ups, wages and any changes you plan to make. Lenders like to see that buffer.

Talk to a real person

Asking what’s possible doesn’t touch your credit file, and we don’t send your enquiry around a list of lenders. A real person reads it, looks at the deal and the timeline, and calls you to plan a route to settlement. Start your enquiry.