It is never too early to speak to a Finance Source or Broker during your search for a business, as you may in fact require guidance on precisely how much you can borrow with the funding you have available.
Having determined both the type of business and the price to suit you, you may now proceed to contact the various agents covering either the area or business category of your choice so that they can send you details of those currently available, together with any that may come onto the market in the near future. Having found a business that suits your requirements and having perhaps very briefly checked back with ourselves as regards funding of it, an offer for the business can be made and, once the offer has been accepted, the matter placed in the hands of solicitors.
It is at this stage that a detailed application form for finance can be completed with these arrangements running in parallel with the legal work necessary in securing the property or business. Your application form should be accompanied by as much supporting documentation as possible. Agents' sales particulars are useful together with any accounting information you may have available. Cash sales forecasts and detailed business plans outlining your proposals are not essential at this stage but they certainly do help in putting the case together.
With a completed application form, we can make a submission on your behalf to an appropriate finance source with an agreement in principle usually being given almost immediately. This agreement in principle (AIP) can sometimes be given even before interview or valuation. The lender will need to carry out status enquiries, but increasingly they insist on having your written authority to make such an enquiry, and usually this authority is given at interview. In addition, the lender will often require an Independent Business Appraisal, but this is unlikely to be commissioned until you have met the lender.
The valuers themselves are very experienced and totally independent and will make observations as regards the true current takings and profitability, the potential available to a prospective purchaser, as well as obviously making comment as regards the acceptability of the price. You should note, however, that these valuations are not always required. Often the lender is prepared to rely on simply a valuation for mortgage purposes. Armed with the valuation report or business appraisal, the finance source will then usually proceed to informal interview, although, as mentioned above, the interview can sometimes take place earlier in the procedure. Certainly after valuation, status enquiries and interview (in whichever order) formal offer can then be issued.
The letter of offer will stipulate certain conditions related to the proposed advance and you must, through both your solicitors, and ourselves ensure that you are in a position to satisfy those conditions prior to exchanging contracts.
Once contracts are exchanged, a completion date is fixed and it is on or just before this date that the funds are released by the lending source through your solicitors to enable you to effect the necessary legal completion.