Should you decide to buy an existing business, several factors enter into consideration of how to finance it. Let us discuss the most important of these factors.

The amount of capital required.

Nearly all sales of small businesses are, strictly speaking, merely sales of the assets of the business. The buyer does not want to purchase "the business" because that would include liabilities, including unpaid taxes, exposure to law suits under the prior ownership, etc. This is not to say, however, that the amount agreed upon is all the buyer needs.

Buyers commonly underestimate the amount of capital required to purchase a business. Capital must be available not only to pay the purchase price but also for: