Sometimes a business’s growth, innovation and ability to adapt to their business environment can be hampered by a business partner that has different priorities which causes an internal issue in which the decision to business partner buyout may be made. We are proud to be Australia’s Business finance specialist especially when it comes to refinancing a business’s finance arrangements.
Why Would You Want to Buyout Your Business Partner?
- You have different ideas for the business’s future growth and due to not being in agreement with the ideal path to follow, the growth and innovation of the business becomes complicated and delayed.
- One partner is wanted to sell due to retirement or change in interests/circumstances which means they wish to exit the business and pursue other options.
- You think that you will be able to bring advantages that the current business does not have and can benefit from.
Some things to keep in mind:
- Typically lending directly against a business without mortgage security is often difficult with mainstream lenders due to the perceived volatility of businesses.
- Buying out a partner may involve taking on additional debt which would be required to be serviced by the business. You should consider the implications of this additional pressure on business cash flow to ensure it is a viable option.
- If you are bringing on a new partner, be sure that you are confident that you will be able to work closely with this person over a long period of time.
- The terms of the buyout can be complex and you should also seek legal advice with any dealings related to buying out a partner of the business.
- There are a number of different lending options available from non-bank lenders which, depending on your business may provide funding without putting your real estate holdings as security. You should speak to an experience commercial broker such as Edgeview Direct to discuss your options.