The Leap
You're about to stop being an employee. Here's how the finance is actually assessed.
The deal, your personal position and the target's trading history are assessed together. The sequence matters because your personal capacity is often strongest while your PAYG income still exists on paper.
The position
The question underneath every other question
Will I lose the house? It is almost never a binary answer. Home exposure is negotiable in degree, in its terms and in the conditions that release it. Those protections are easier to define before the deal is submitted.
You are probably an expert in the work and not the numbers behind the transaction. The vendor, the broker and the lender each read those numbers for a different purpose. The acquisition needs its own credit reading before you commit.
Common assumptions
What you've been told, and why it's wrong
| Told | Why it's wrong |
|---|---|
| Get the business loan sorted first, then worry about the house | Backwards. Personal capacity is often strongest before the leap, while PAYG income still exists on paper. |
| You'll need to put the house up | Often true, but negotiable in degree, terms and release conditions. |
| Banks won't lend on goodwill | Too simple. Goodwill is funded. The questions are proportion, security and valuation support. |
| You'll need two years of financials in the new entity | Not for an established acquisition. The target's trading history is assessed. |
| Get pre-approval first | The deal, target's financials and proposed structure are assessed together. |
| The vendor's accountant has done the numbers | That work is for the vendor. Sale-memo add-backs are often generous and are discounted first. |
| Just use redraw on the house, it's cheaper | That converts business risk into a direct claim on the family home. |
Our work
What we do about it
Read the target's financials the way a credit team will.
Model the sequence across the purchase and your personal borrowing.
Structure security so home exposure is defined, limited and has release conditions written in at the start.
Tell you plainly if the deal will not fund as presented.
We don't tell you whether to buy. That's your decision and your accountant's analysis.
Guide coming soon
Financing a Business Purchase in Australia
A detailed guide to deal structures, goodwill, security, vendor finance and the sequence of personal and business borrowing.
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