3 No-Money-Down Tips to Buy Businesses from Dealmaker and Influencer Jonathan Jay

3 No-Money-Down Tips to Buy Businesses from Dealmaker and Influencer Jonathan Jay

Acquiring a business is pivotal because you get a complete business setup without having to start one from scratch. That doesn’t make it a walk in the park though; one will have down payments and investment forms to worry about in order to buy the business in the first place. Here’s where Jonathan Jay, a world-renowned dealmaker who shows people how to buy and build businesses to a profitable level, comes in. Having purchased dozens of companies himself over his 20+ year business career, he imparts widely applicable, broad-based, tried-and-tested business techniques to anyone in need of them.

Since dropping out of college at 19, Jay – having always been his own boss – has never worked for someone else. After selling his publishing company, he developed a strong desire to succeed in business and accidentally stumbled into M&A in 1999. After a few years, he’d bought out a prominent competitor in another sector, merged it with his existing business, and sold it to a London-based private equity firm in a life-changing deal in 2007.

According to Jay, three sure-shot ways have helped hundreds of people find financing for buying a business. He suggests trying them all out and investing in one that suits your requirements:

Asset financing

Asset financing is when a company or a business owner seeks to secure a loan by pledging fixed assets from the balance sheet as collateral. Organizations can use asset financing instead of traditional financing because the loan is based entirely on the value of the assets rather than the company’s creditworthiness. Jay says that the loan received through asset funding can be repaid using the profits earned by the companies once its processes are up and running. He believes it is a foolproof method for setting up necessary finance for acquiring a business without using buyers’ cash.

Invoice discounting

Invoice discounting allows you to access funds in your accounts receivable ledger – unpaid customer invoices – much more quickly. Jay says that rather than waiting for other types of loans, you can use the outstanding invoices to pay for the business or go to a specialist lender or an invoice discounting company to get an immediate loan against those invoices. Additionally, he says that these businesses will give you a loan for up to 95% of the invoice value, paying you in a matter of days rather than weeks. You can repay the loan once you have received payment from your customers.

Using the cash in the business

Although few people are aware of it, Jay believes that using the cash balance already available in the business is one of the most efficient ways to fund the purchase. That money can be used as initial consideration – the payment made at the end of the transaction. Furthermore, Jay suggests you use the cash at the bank available as retained profits that have not been distributed to shareholders.

Giving the seller the cash already in the business makes them happy because it prevents them from paying higher taxes. On the other hand, Jay claims you can win as a buyer because you don’t have to put your money into the transaction. Furthermore, once the owner is removed, their personal expenditures cease overnight, and the cash flow improves within the organization.

Jay offers a wide range of seminars, online/offline workshops, and guides through The Dealmakers Academy to help people learn easy business acquisition tips and tricks. If you are in the market buying a company or want to learn the basics of mergers and acquisitions, follow Jay on his YouTube channel.

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