How to Find a Business to Buy (Even The Hidden Ones)

How I Bought My Million-Pound Business

I negotiated to buy a civil engineering firm with £2M in revenue. I agreed on a deal for £500k, even though the seller wanted £850k. The structure?

• The seller financed £260k. We agreed on this in 10-15 minutes, which included time to explain seller finance. The business would pay this amount over 5 years at 0% interest. The business would secure the loan on its assets. They did not need a personal guarantee.
• £50k for a 10% share of the deal - they agreed to run the business using their sector knowledge.
• I secured £60k in asset finance without difficulty - even though I didn’t own the business at the time.
• I arranged £120k in invoice discounting - It took the most time, but I managed it even though I didn't own the business.
• £10k of my own cash - just 2% of the price.

It was creative. Elegant. Smart.
But I lost it to a cash buyer.

I made a mistake. I took too long to arrange the invoice discounting finance. Then, the cash buyer swooped in with an extra £100k cash offer. Because of that, I lost the deal. I recommend reaching out to off-market business owners to steer clear of this problem.

💡 Lesson learned? The deal only works when the seller feels motivated — not you, but you need to move fast. What I should have done was ask the seller to increase the seller-finance part of the purchase price.

I stayed patient, but I became a motivated buyer.

I didn’t want to lose another deal, so I rushed into using a bank loan on my next deal. This was a £1.6 million revenue-fitted furniture business. The structure:

• £100k seller finance - this helped to close the gap between the bank loan and the cash I had in my other business.
• I took out a £170k bank loan - this meant handling the deal as an asset purchase. It created an administrative nightmare. I had to transfer agreements, employment contracts, banking, and customer credit card payments. I also faced loan guarantees and many bank hurdles.
• I had £80k cash from another business - I was lucky to have it. But looking back, I became a motivated buyer. You should avoid this. That is why building a deal pipeline is important.

It worked, but the hoops I jumped through for the bank were brutal:

• 📑 Personal guarantees - with the risk of losing my home.
• 📑 Security - this included property and a government-backed scheme. Banks rarely lend without security.
• 📑 Too many financial projections and credit checks can be a problem - bank loans won’t work if you or your business doesn’t score well.
• 📑 Previous business ownership/experience - I was lucky to have this, but you may not. There is a way around it, but it's another hoop to jump through.
• 📑 The deal required an asset purchase because banks usually don’t lend against shares - this creates a complex transfer process. Individual assets and contracts might need specific transfer formalities, which can cause delays. Plus some sellers may not even agree to this type of sale in any case.

Today? I wouldn’t take the same route again. Seller financing is faster, cleaner, and keeps you in control.