Buy A Business Without Cash / Buying a Business / Jonathan Jay / 2023
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- Опубліковано 5 лис 2019
- Your free training on how to buy a business without cash is here: bit.ly/4ajGRQH
Are you looking for ways of buying a business without using your own capital?
In this video, Jonathan Jay shares six different methods to buy a business without spending any of your own money. Business mergers and acquisitions typically require capital, whether it's borrowed from a bank or borrowed from friends and family.
But what if you could buy an existing business that is already up and running without using your own capital?
Jonathan Jay discusses five different business acquisition strategies for buying a business without using any of your own money.
The first method is to find a distressed business, which is under financial pressure and may have debts. By doing a one-pound deal to buy the business, you can take on the liabilities of the company.
You can solve the problems that the previous owner had with fresh eyes and enthusiasm.
The second method is to use someone else's money. There are plenty of people who want to be part of a business acquisition but don't want to take responsibility for the business. You can give them a chance to be a shareholder in the company and buy twenty or twenty-five per cent of the shares for a lump sum. You can use that lump sum to help finance the deal.
The third method is to agree on a deal structure with the seller of the business. You can defer 100% of the acquisition payment for the company and spread it over the next five years, for example. This means you pay the seller of the business a certain amount each year until you've paid off the agreed amount.
The fourth method is to use vendor financing. You can ask the owner of the business to finance part of the deal, which means they lend you the money to buy the business, and you pay them back over time. This is a great way to buy a business without using your own money.
The fifth method is to use a lease purchase agreement. You can lease the business for a period of time and have the option to purchase it at the end of the lease. This is a great way to test the business before you commit to buying it.
The sixth method for purchasing a business is to use a combination of these methods. You can use vendor financing, deferred payments, and other methods to finance the purchase of the business.
If you're interested in buying a business without using your own capital, then this video is for you. Jonathan Jay shares six different methods that you can use to buy a business without spending any of your own money. Check out the video now to learn more! - Навчання та стиль
If you enjoyed this video and would like to take the next step to learn the best ways of buying a business, without risking your own cash, you can access my free training at bit.ly/4ajGRQH
Thank you!
I made lots of money buying companies with problems I knew how to solve the problems then resold them as good companies with no problems .
Number five and six just might help me buy that motorcycle shop. I’ve been dreaming of thank you for this video.
This is gold thanks 💝
Glad you like it!
Very good informative vedio sir thanks again 👍 Sir
Some aspects can be used
Hey @Jonathan need some advice on a business (gym) which is on sale but I don't have enough funds to acquire it. Which would be the most advisable choice to take?
Excellent!
Glad you liked it!
Good evening Jonathan
Could you do a video explaining how to source a good deal making team
Cool content
Hey . Really informative video .
Please guide me with this situation .
I own a steel manufacturingbusiness . And want to buy a steel plant in order to expand my business . I wish to buy the plant through lease cum buy option for which I am willing to pay 1.5 times the price of the business but with no money down . How do I find business owners who would want to sell their business at the said premium ?
Thanks a lot .
Hello Jonathan, very interesting topic! Any way to exchange with you about an opportunity I am working on? I need someone like for to pull of a complicated deal.
Please make a video on how to find best business to buy and how to find that that business in good or not good to buy
Hey @Jonathan let's start a company already 😁
How do you establish trust with an owner when structuring an earn out? In other words, how do you ensure them that they will receive their performance-based payments as agreed without them having any visibility into the business's P&L's, etc.?
You're right - it's very important - partly down to your personal credibility and partly the legal protections you provide
@@theDealmakers Thank you! Enjoying your content.
@K C --- Typically, as long as the 'Seller' has guarantees stipulated in the Purchase & Sale Agreement that they (the Seller along with the Seller's attorneys or accountants etc) are entitled to review the financials statements by a certain date each year during the earn-out period, the Sellers are usually satisfied with that arrangement. These fears are usually appeased via various clauses that can easily be included in the contracts between the buyer and the seller.
It's a contract/liability for the business just like any other long term note. It's just a private note that is held by the seller instead of a bank.
Rarely practical
this is how all businesses are bought - unless you have a lot of money - and most people don't
Do you purchase or refinance for assets based finance? Ss I do not own the business or property but aiming to purchase both to the sell lands of which then pays off the loan essentially.
It's a refinance
According to the sixth method:
1. business Purchase $ 1 million,
2. The business account has $ 100,000
3. The owner leaves the money in the company,
4. The company will be worth $ 1.1 million.
5. The owner does not have to pay 40% tax on if he would take a dividend, but only 10% because he left the money in the company,
does this mean that the remaining 30% can be used as personal capital to get a loan from the bank and with it pay the owner?
6. What percentage of UK tax is paid on the profit from the sale of the business?
Please watch more videos on this channel as your logic went wrong from point 3
@@theDealmakers I saw all the videos and there was no more extensive information in the videos on this point.
I'd be happy if you direct me
@@Yoni_Eliav
Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow.
So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it.
But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
@@billionaireacquisitionmast459 I just visited your channel & subscribed. Your doing a great job❤️ Hopefully you get more visitors too
That is was I looking for, could it be also combined between an LBO and a seller financing? And what if the buyer has some personal debt not related to any business? There's any kind of way structure where the bank doesn`t need any of the histories of the buyer?
Sam is here : yes, absolutely. Personal debt is largely irrelevant unless the company has a charge over it as a result.
Unsure what you mean in the final sentence
@@SuccessTrackUK Thanks for the advice!
What about getting a business loan as a down payment to finance an owner seller contract?
You could, but that's probably going to be hard to achieve - there are easier ways to finance a deal
I like the 5th and 6th method, especially the 6th one. Can you go into more depth please?
I might well do that on another video
Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow.
So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it.
But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
Mind blown. 6th method. Tell me more.
what do you want to know?
@@theDealmakers Thanks for responding. I would like to continue this conversation via email, if possible. I find your thought process very intriguing. What would be the best method of contacting you? Much appreciated.
@@gd6576 if you want to learn how to buy a business this way, then this is the best course to attend: www.thedealmakersacademy.com/FAST
@@gd6576
Like I tell people we are not evaluating businesses we are making offers, with that said; your offer is based on the formula of ( cashflow / risk ) while maintaining a base of 1.75x DSCR for debt repayment and retention of cash-flow.
So in the case you Illustrated, the seller instead of taking a lump sum upfront they would take the payment over a series of years ( seller finance ) with interested on that money, when purchasing the company you will ask the seller for working capital ( the formula is what's the break even for the month x amount of months, usually 3-6 ) and / or if there is money left in the business you can use that to get a working capital loan on it.
But your debt repayment is not based on the money in their bank account but the yearly cash-flows. And minimum you want $300k in earnings, the lower the riskier and the less likely to get external funding. Investors want minimum $1M in earnings as there is more "meat on the bones" and rightly so.
@@billionaireacquisitionmast459 my mind is blown by all this knowledge in the comment section 🤯.
Can I buy Jonathan Jay?
Is it possible to approach a business which is part of a franchise in this way, or do you think it would weaken a person's chances, because franchises are more financially stable.
I never advise anyone buys a franchise
@@SuccessTrackUK What is wrong with buying an existing franchise? I am very curious about this statement
@@megamistful why Would you buy a business where you can’t change the name, can’t change the products, can’t change the pricing, can’t change the marketing and have to pay a percentage of turnover to someone else?
@@megamistful I own a healthcare franchise and I will NEVER buy another franchise in my life.
@@megamistful Basically Franchise is buying yourself a Job. The franchise business model is designed to make the FranchiSOR rich, not the FranchiSEE. Jon is 100% right. No franchisee ever becomes rich.
Can I aquire a business without PG?
yes, you can
Do these techniques work in Europe and all over the world ?
yes- every country has it's own legal and accounting rules but the principles are the same
Love your content. Does this apply to USA also .
yes, it does - any country
@@theDealmakers thank you so much for this clip right here. Took lot of note.
However, a question that keep coming up for me was.
@@theDealmakers Got your book. And I can confidently say, I don't know how to put it down. Got it last night. 80% done.
I do have a question that I could not find in the book.
What is the business structure best set up for a Merger and acquisition business like this (LLC, C Corp, S corp, B crop) etc?
@@maximo5737 My advice in this area only cover the UK - you would need specific accounting/legal advice for your country
Can this be applied in the U.S.?
yes, it's the same world-wide
hi jo , now one sells business unless it was losing, otherwise they won't , if retiring they give it to there son , or any relative ofr friend
are you saying that no one ever sells a profitable business? Interesting opinion
Not everyone wants to take over a business, I know many people who owns business and a son or daugther, but their offspring have no interest in becoming a business owner
My dad sold his business instead of giving it to me because he’s a stubborn man and wouldn’t listen to my business development ideas. It was always his way which is why it wasn’t working out for him
Nearly for 2 minutes you are repeating the same statement lol
some things are worth repeating
I felt the same way
Don’t listen then go away
What a silly comment...the man put to much effort to make that video you have to participate it at least...
Proof that small minds are everywhere
they way you present it as the seller is an idiot and as a buyer , i am the genius hypnotise the seller
nope, not at all
Jay,
???
I got very bad credit
How do I go through
go through what?
@@udbdkuhsvd5000 your credit score isn't relevant when buying a business
In regards to credit, anybody who owns over 20% equity in the company has to sign off, but you can get someone else to sign off for you as the guarantor. There are also options like Personal Guarantee Insurance.
Jonathan... I am a former lawyer. I went through tough financial issues due to marriage breakdown. My credit rating is knackered but I am determined to get back on my feet. Can I work this model with a poor credit rating? I have some good ideas for acquisitions from my prior area of expertise..
Raj B your credit rating isn’t really relevant
Jonathan Jay thanks but won’t my ability to obtain credit impact my power to fund or invest into the acquisitions ... even if i don’t physically need to dip into credit
(I understand buyer finance etc) ... do I need to show financial strengths on a private level?
@@rajb688 no, you don’t
I agree, but what if the bank money platform is missing?
what's a money bank platform?
my mate wants to sell his business for 183k , the yearly revenue is 300 pound /year
This explanation is not clear for me. It will be more understandable if you write some scheme or make some illustration
literally showing my mum this for meme value
If I could show you how to buy a business without actually showing you how to buy a business without any money and if I could show you how to buy a business and say the same thing over and over and over
Well, there are actually six methods in this video
more than 2 mins to say just one line?????
My plan is to buy a hotel business which is doing well
Same let’s partner up and be learning buddies lol
@@Loreleiiii before that for my personal satisfaction like to develop professional qualifications and knowledge in the field of finance and statistics, so that can be cfo of my own business
Wrong mindset
A minute and a half in and all that's been said is the 'title' of the video in a number of different way. In business, you cut to the chase. So... I'm out!
You should remove this from youtube
why is that?
@@theDealmakersThis is really a good information and can be crucial in creating the red sea of competitors... I mean, I am literally going to the banks this week to see if we could do something with it (Croatian banks).
I messaged you on LinkedIn and hopefully we speak soon.
Stay safe.
@@delta1200 you're only competitors are those who take action - and that's always less than half
@@theDealmakers I agree. I like to work in a way that if I receive an information from someone that I benefit from, to show gratitude. I also noticed that not everyone works in that way, hence exposing myself may not be a good idea. But this is only me.
From your videos I noticed that you have the confidence to trigger the minds of the people, I highly respect that.
Jonathan i need help plz on how to buy a business i need some advice plz
Repeat repeat and talk like you are deaf!
thank you!