One of the most common business start-up scenarios is when two professionals have experience in a specific sector, recognise that they each have a talent that can complement the other and then decide to start-up a new partnership. With hard work they make it a success, employ staff and have a very profitable business. However, over time one of the owners becomes restless and decides they want a career change leaving the question “what do we do next”.
The natural solution to this situation is for one of the partners to buy out the other partner. The key question is how do you raise the funds without affecting the operating profits of the business? Fortunately, there is a finance package designed solely for a partnership buyout. Partner buyout financing allows one of the business partners to access funding which will allow them to outright purchase the business from their partner, making them the sole owner. Opting for a finance package will also not have a negative impact on business cashflow, the business can continue to grow and operate successfully during the transfer of ownership.
Another financial solution available for a business buy-out is a business development loan. This is a particularly useful solution when taking sole ownership of the business. You can fund the entire purchase and make regular repayments over an agreed period.
Of course, whilst we have focused on the whole buy-out scenario, on occasions this might not suit the partner left in charge. A simple option for them is to consider a buy-in. This is where you look to introduce a new partner who will buy in to the business. The key benefits with this approach are that you can identify a professional who can bring a fresh approach and a new skill set into the business. This has the opportunity for increasing revenue and profits whilst also being able to diversify in to new or different markets and sectors.
If you have any questions or need some help with financing a business buy-out, then our team would be delighted to help. Please call us on 01993 706403 or e-mail firstname.lastname@example.org.