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How to Financing your purchase

How to Financing your purchase

If you don’t have a nest egg saved up or an equity partner, then you may need to borrow to finance your purchase. That’s when it’s time to call your Business Banker.

Your Business Banker will need key financial information about the business, including profitability, cash flow, sales forecasts and growth potential. Your Business Banker will look for a sound business with healthy cash flow to ensure you can repay the loan.

You’ll need some equity in your business by investing your own money. And you’ll usually need to provide security for the loan, such as a residential property, business assets or other assets, like a share portfolio.

What you’ll need

  • The current balance sheet.
  • A full tax return for the business (less than two years old).
  • A profit and loss statement for the business (less than two years old).
  • Details of your qualifications and any previous experience in running a business.
  • Information about your personal assets and liabilities.
  • Details about the equity you plan to invest in the business.

Depending on your experience and the profitability of the business, you may also need to put together forecasts of expected profit and loss and cash flow for the first two years.

Pitfalls to avoid

  • Leaving it too late. It can take time for your banker to assess your new venture. Leave yourself time to put your application together and secure finance before you need to sign on the dotted line.
  • Too little financial information. Your banker needs all the key numbers to make a decision. Cutting corners on your application could mean you end up gathering more information later.
  • Not borrowing enough. A lack of money to keep the business going is a common cause of business failure. You need to ensure you have enough capital to feed your business from day to day, without starving it of cash flow.


  • Important information 

    As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances. All products mentioned on this web page are issued by the Commonwealth Bank of Australia.