Finance the purchase of a business
- Leasehold case study
Leasehold Case Study
on how the business finance works
The client is looking to buy a newsagency business with 10 years unexpired on the lease. The purchase price is £80,000 plus £10,000 stock at valuation, £2,000 for the first quarters rent and £4,000 for the newsbill deposit. Total ingoings amount to £96,000. Lenders are usually happy to advance £48,000 (50% of total ingoings) which coincidentally is also 60% of the price itself. This would be made available over a period of 7 years.
The client has £48,000 as a cash deposit plus funds to cover purchase expenses.
Had additional collateral been offered by way of a charge on freehold property, a loan of up to £80,000 would be available, subject to proven repayability, and could be repaid over 10 years which is the maximum period of repayment on leasehold lending.
Finance Links:
This links below will help you understand the
finance aspect of a purchase of a business.
