You may be wondering how anything can be purchased without cash in this capitalist society, but we are here to tell you it is not impossible under the right circumstances. If you go up to someone and say that you want to buy a company without having a lot of cash, they will look at you as if you have gone crazy. So the first step to such an undertaking is to do your research and then formulate a solid plan.

Clearing your credit errors

The first stage of the process is to check your credit score! You might want to clean up any bad credit or check for errors in your credit statements. Hardly any business owner will agree to make a cashless exchange if you have not proved financially independent and responsible with money. You would be surprised at how many owners will be willing to sell by looking at your high credit score.

Finding motivated buyers or sellers

The whole route also depends on finding a motivated buyer or seller for a company, i.e., someone who has been waiting to buy and sell for a long time, someone close to retirement, etc. This could also be someone whose business is not performing up to their standards and is looking for someone with good management skills and acumen to turn the situation around. It would be wise not to take a step like this unless you are very sure you could right the sinking ship or end up with a loss you did not bargain for.

Obtaining owner financing

The most important way to make a cashless exchange is to obtain financing of some kind. One way is owner financing, where the owner lends you the cash to buy their business instead of a bank. The seller offers funding by creating a cash outlay that is payable within several years and at a specific interest rate.

Having the owner bankroll most of the acquisition is a particular way of financing that keeps the original seller indirectly connected to the business. This is because purchasers usually make the payments using the cash flow of the recently purchased business.

It is important to note that there would hardly be a lot of sellers lining up to finance the sale of the own company, and it will be even rarer to find someone who would finance the venture fully. Most would usually ask for a down payment that you would have to drum up from somewhere.

A combination of loans

Another option is to take loans from several other sources that could even include your close friends and family. It doesn’t have to be a charity or an indulgence in your plan. You could do a sales pitch, offer returns on their investments, and generally get them involved in the whole process. As a buyer, you could also obtain a small business loan for the first everyday expenses, as getting a large business loan from a bank is a challenging and complicated procedure.

Inviting Other Sources

It is not a terrible idea to look at small business grants and local funding opportunities for your acquisition needs.

In truth, grants for small businesses aren’t readily available at any given time. Although, once the company is functional and running smoothly, it will be easier to find and obtain local funding. The downside of relying on such financing is that it usually comes with strings attached. So if you are willing to go along with all the requirements, then it will be quite an easy path to buying a company. The local lending firms are always a good place to start, and they will guide you on whatever the best path is to your current goal.

Do not forget that there are a lot of crowdfunding possibilities in today’s world that are truly ingenious ways to raise funding for ventures of these sorts. You can raise money online, as Kickstarter campaigns sometimes require not paying it back! That’s not a very reliable way to go about buying a company, though. The owners will indeed look for someone dependable and not for a shortcut.

All this proves that buying or selling a business without cash is quite a lot of hard work, but it can be done if you are prepared to go all the way.