The Business Guide
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is never too early to speak to a Finance Source or Broker during your
search for a business, as you may in fact require guidance on precisely
how much you can borrow with the funding you have available.
Having determined both the type of business and the price to suit you,
you may now proceed to contact the various agents covering either the
area or business category of your choice so that they can send you
details of those currently available, together with any that may come
onto the market in the near future. Having found a business that suits
your requirements, an offer for the business can be made and, once the
offer has been accepted, the matter placed in the hands of solicitors.
It is at this stage that a detailed application
form for finance can be completed with these arrangements running in parallel
with the legal work necessary in securing the property or business. Your
application form should be accompanied by as much supporting documentation as
possible. Agents' sales particulars are useful together with any accounting
information you may have available. Cash sales forecasts and detailed business
plans outlining your proposals are not essential at this stage but they
certainly do help in putting the case together.
The lender will need to carry out status
enquiries, but increasingly they insist on having your written authority to make
such an enquiry, and usually this authority is given at interview. In addition,
the lender will often require an Independent Business Appraisal, but this is
unlikely to be commissioned until you have met the lender.
The valuers themselves are very experienced and
totally independent and will make observations as regards the true current
takings and profitability, the potential available to a prospective purchaser,
as well as obviously making comment as regards the acceptability of the price.
You should note, however, that these valuations are not always required. Often
the lender is prepared to rely on simply a valuation for mortgage purposes.
Armed with the valuation report or business appraisal, the finance source will
then usually proceed to informal interview, although, as mentioned above, the
interview can sometimes take place earlier in the procedure. Certainly after
valuation, status enquiries and interview (in whichever order) formal offer can
then be issued.
The letter of offer will stipulate certain
conditions related to the proposed advance and you must, through your solicitors
to ensure that you are in a position to satisfy those conditions prior to
exchanging contracts. Once contracts are exchanged, a completion date is fixed
and it is on or just before this date that the funds are released by the lending
source through your solicitors to enable you to effect the necessary legal
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