Finance the purchase of a business
- Freehold case study
Freehold case study on how the business
finance works
The client is looking to purchase a freehold convenience store. The purchase price is £500,000 plus £35,000 for stock at valuation. However, the property (bricks and mortar) value is only £300,000 and the client is looking to borrow £350,000 which is in excess of the vacant freehold value.
The lender agrees a facility of £350,000 (116% of bricks and mortar value) over a period of up to 20 years secured solely against the freehold business. The client has the remaining £185,000 cash plus sufficient funds to cover purchase expenses.
Had additional collateral been offered by way of charge on freehold property, a loan of up to £500,000 would be available, subject to proven
repayability.
Finance Links:
This links below will help you understand the
finance aspect of a purchase of a business.
