Business Acquisition Loans: Broker Assessment

A business acquisition loan funds the purchase of an existing business, including eligible assets and purchased goodwill under the lender’s terms. To assess business purchase finance, reconcile the price, test post-purchase cash flow and match each funding source to a defined cost. The buyer’s contribution and security depend on the transaction and lender assessment.

Break Down the Purchase Price

Break the purchase price into the items the buyer receives, then add the cash needed to complete the purchase and operate after settlement. A sale advertised at $800,000 can require more than $800,000 of total funding once costs and working capital are included.

Separate the uses of funds before approaching a lender.

Use of funds	Evidence and funding question
Plant, vehicles and equipment	Match the asset schedule to ownership, condition and valuation. Identify any existing finance to discharge.
Stock	Establish how stock is counted and valued at settlement. Allow for obsolete items and price adjustments.
Purchased goodwill	Identify the value attributed to continuing earnings, customer relationships and other intangible benefits. Test whether those benefits transfer to the buyer.
Working capital	Calculate the opening cash needed for wages, suppliers and the delay before customers pay. Separate this from stock already included in the price.
Fees and adjustments	Include professional fees, lender costs and agreed settlement adjustments. Have the accountant determine relevant tax amounts.

Reconcile the allocation with the sale agreement and valuation. Identify whether the buyer acquires specified assets or shares in the entity, because the documents and liabilities being assessed differ. An allocation agreed between buyer and seller doesn’t establish the value a lender accepts or the amount it will advance.

The Australian Government’s business purchase guidance recommends financial and operational due diligence before committing. Keep valuation and legal review separate from the broker’s funding assessment.

Assess the Buyer and Business

A lender assesses whether the buyer can run the business and repay the proposed debt from the cash available after purchase. The seller’s past profit is evidence for that assessment, but the buyer’s staffing costs and debt commitments can change the repayment result.

Record the buyer’s relevant industry experience, qualifications and management plan. Explain who runs daily operations, which staff remain and how the buyer replaces any work currently done by the seller. Verify the buyer’s cash contribution, personal financial position and existing commitments.

As at October 2026, Commonwealth Bank of Australia’s acquisition guide links its assessment to profitability and cash flow. It also asks for buyer qualifications, personal assets and liabilities, plus equity details. Depending on experience and profitability, it can require profit-and-loss and cash-flow forecasts for the first two years.

Have the accountant reconcile financial accounts and tax records with bank receipts and actual trading. Normalised cash flow adjusts historical results for costs or income that won’t continue under the buyer. Support each adjustment with records, then include a market wage for replacing the seller’s work and any changed rent or supplier terms.

Test the exposures that can reduce cash after settlement.

• Show the share of revenue from major customers and whether their contracts continue after the ownership change.
• Identify reliance on the seller or an employee whose departure would disrupt operations. Include replacement costs and any documented transition support in the forecast.
• Compare lease expiry, rent reviews and assignment conditions with the intended operating period.
• Establish which licences or permits the buyer needs and whether the transfer or a new approval is required.
• Model slower collections, weaker sales and higher operating costs against all proposed debt payments.

For a hypothetical assessment, the accountant calculates annual cash available for debt payments at $180,000 after operating costs, owner remuneration and tax provisions. Proposed senior-loan payments are $90,000, asset-finance payments are $24,000 and vendor-loan payments are $36,000 each year. Total annual payments are $150,000, leaving $30,000 on those assumptions.

A $40,000 reduction in annual cash available creates a $10,000 shortfall. These assumed cash payments are not loan quotes or evidence of a lender’s required buffer. Model the monthly cash balance too, because a profitable year can still contain an unfunded payroll or stock payment.

Structure the Funding Mix

Match buyer equity and each proposed facility to the purchase costs, then test their combined repayments against the buyer’s forecast. A funding source counts only when its purpose, amount and availability fit this transaction.

Funding source	Potential use	Condition to reconcile
Buyer equity	Purchase contribution, costs or cash reserves	Prove the funds are available and identify any borrowing used to provide them.
Senior acquisition debt	Agreed eligible purchase components	Obtain transaction-specific terms for contribution, security and repayment.
Asset finance	Identifiable vehicles or equipment	Confirm the assets qualify and avoid financing the same cost twice.
Working-capital facility	Operating cash shortfalls after settlement	Match availability and limits to the forecast’s payment dates.
Vendor finance	A deferred portion of the seller’s price	Reconcile repayments and security with the senior lender’s requirements.

The asset finance guide covers separate funding for vehicles and equipment. An equipment facility’s contribution terms don’t establish the contribution needed for the whole business purchase.

How Much Deposit Does the Buyer Need?

Calculate the buyer contribution as total required funds minus the finance actually approved for the transaction. A contract deposit paid before settlement is part of that contribution, so avoid counting it again. Leave sufficient operating cash after paying the contribution and costs.

Purchased goodwill, tangible asset values and available security affect what the lender can fund. Vendor finance can defer a purchase payment, but it remains debt with its own repayment obligations. The senior lender determines whether the proposed vendor arrangement is acceptable and how it affects required buyer equity.

As at October 2026, Commonwealth Bank of Australia’s acquisition guide requires the buyer to invest their own money, without quoting a standard contribution percentage. Obtain its transaction-specific equity requirement through the acquisition assessment. Apply each selected lender’s current written contribution rule to the actual price allocation and security, without assuming a market-wide deposit rate.

Consider a hypothetical $800,000 purchase with $40,000 of costs and $60,000 of opening working capital. Total funding needed is $900,000. Assumed approved facilities comprise $500,000 of senior debt, $100,000 of asset finance and $100,000 of vendor finance, leaving $200,000 of buyer equity.

Those allocations illustrate reconciliation, not lender limits. If the buyer has already paid a $50,000 contract deposit from that equity, the remaining equity payment is $150,000. If the senior lender rejects the $100,000 vendor loan, the funding gap rises by $100,000 unless another approved source replaces it.

Can an Unsecured Loan Fund the Purchase?

An unsecured loan can be considered only where the lender accepts the acquisition purpose and the applicant meets its eligibility rules. Establish which entity’s trading history the lender assesses. A newly formed buyer entity cannot assume it inherits the seller’s eligibility.

As at October 2026, ANZ GoBiz excludes borrowing to buy another business. Its fast online route therefore doesn’t solve this acquisition task. That exclusion applies to GoBiz, not every ANZ business lending route.

As at October 2026, National Australia Bank’s QuickBiz eligibility rules require at least 12 months of business operation. Requested accounting data must cover at least 12 continuous reconciled months. These requirements don’t establish approval for a newly formed acquisition borrower or acceptance of a particular purchase.

For an acquisition-eligible unsecured offer, record any personal guarantees and security interests required in the actual documents. A personal guarantee makes the guarantor liable under its terms if the borrower defaults. Absence of property security doesn’t remove guarantee obligations, eligibility checks or the need to demonstrate repayment capacity.

How Does Vendor Finance Work?

Vendor finance, also called seller finance, defers an agreed part of the purchase price for repayment after settlement. The buyer pays the agreed upfront amount and owes the balance to the seller under documented terms. A listing mentioning vendor finance doesn’t establish an agreed loan or senior-lender consent.

LegalVision’s vendor-finance guidance explains the repayment and security terms that need documentation. Record the upfront payment, deferred amount, interest basis and repayment dates, including any final lump sum. Identify guarantees, default rights and the assets securing the vendor loan.

Where the vendor and senior lender seek security over the same assets, have the lawyers reconcile their priority and enforcement rights. LegalVision’s settlement guidance explains how an existing bank security can rank ahead of the seller’s interest. Obtain the senior lender’s required consent and priority documentation before relying on vendor finance in the funding plan.

Include vendor repayments in the cash-flow forecast even if repayment starts later. Have the accountant advise on tax consequences and the lawyer draft the sale and loan terms. A deferred payment doesn’t remove the liability or prove the business can support it.

Test Goodwill and Security

Purchased goodwill needs evidence that the business’s earnings and customer relationships continue after the seller leaves. Machinery has an identifiable asset and resale market. Goodwill depends more directly on the business continuing to trade, so the acquisition assessment must explain that continuity.

Trace the goodwill value to the independent valuation and due-diligence findings. Test whether major customers remain, the business name and other rights transfer, and the buyer can operate from the same premises. A price allocation labelled goodwill isn’t itself lender security or proof of a financeable amount.

Prepare a security schedule showing each proposed asset, its owner, assessed value and existing secured debt. Separate property mortgages, security over business assets and personal guarantees. Have the lawyer establish the correct Personal Property Securities Register (PPSR) searches and required releases for the transaction.

Obtain independent valuation where required for the business or proposed collateral. The lender’s written terms must identify the value it accepts, security it requires and conditions for releasing existing interests. Don’t assume an owner’s home is included merely because the loan buys a business.

Classify a specialist acquisition early. Use the medical practice finance guide for practice-specific assessment, and the mortgage broking business sale guide for brokerage transfer and handover issues.

Package the Acquisition File

Package the file so the lender can trace the requested amount to the transaction and the repayments to verified cash flow. Align the document set with the selected acquisition route and explain differences between seller history and buyer forecasts.

Prepare the evidence the transaction requires.

• Provide the sale agreement, price allocation and schedules, including stock adjustments and liabilities the buyer assumes.
• Include financial accounts, tax returns, business activity statements and bank records for the required periods.
• Attach the accountant’s normalisation work and monthly forecasts, with assumptions and all proposed debt payments.
• Supply the business and collateral valuations, plus relevant due-diligence findings.
• Include the lease, assignment or landlord consent, licences and permits needed to operate.
• Provide the buyer’s experience, management plan, assets and liabilities, borrowing-entity details and evidence of contribution funds.
• Attach proposed vendor-loan documents and the terms of each other funding facility.

Keep a conditions checklist with a responsible party, deadline and completion evidence for each item.

Condition	Evidence before settlement
Finance approval	Written offer matching the borrower, amount, purpose and agreed funding mix, with remaining conditions identified.
Due diligence and valuation	Relevant advisers’ completed findings and resolution of items that change value or funding.
Lease and operating permissions	Required consents or approvals available by the date the buyer takes over.
Vendor funding	Signed terms, senior-lender consent where required and completed priority arrangements.
Security and releases	Lender-required security documents and the lawyer’s arrangements for discharging existing interests.
Funds and adjustments	Contribution verified, deposit counted once and final settlement statement reconciled with available facilities.
Settlement timing	Finance availability matching contractual deadlines and the buyer’s operating cash needs.

A request for fast business acquisition finance still needs a viable borrowing route and completed transaction conditions. A quick conditional decision doesn’t establish that funds are available for settlement. Start lender assessment early and give the client’s lawyer the funding timetable before contractual deadlines are agreed.

The proposed purchase is ready to fund when the written facilities cover the final settlement amount and opening cash needs, and the required conditions are satisfied. Any price adjustment, changed vendor terms or reduced facility needs a revised reconciliation before the broker describes the purchase as funded.