Financing to buy businesses is a specialist area and something that you should take advice on if you are looking to buy a business and need to borrow money to do so. In the case of leasehold businesses this is a particularly challenging area and one in which it is probably easiest to say that you should not rely on being able to borrow money against a leasehold business if you wish to purchase it.
Most lenders want to look at your ability to not only repay the loan but to make sure they have adequate security against which to base their loan. In the case of a leasehold business there is not a property to which they could secure the debt and so the value of the fixtures and fittings would generally be fairly small and as such not really give the bank security or confidence that their loan is protected.
If you have other assets already that would probably be easier to secure new debt against so that it frees up capital for you to purchase a new business. Whether you choose to get a personal loan is entirely up to you however it is important to be clear with the lender what you are planning on spending the money on and ensuring that you have the ability to repay the loan as well.
If you are selling a leasehold business in the vast majority of cases buyers will have cash available to them and that removes the uncertainty of a buyer needing to raise finance to go ahead with the purchase. We always say to potential buyers that their finance should be in place at the time they make offers on a business. Providing proof of that finance is fairly simple and straight forward and it helps to back up your offer and give the seller confidence that they are dealing with someone that not only says they have the money to do the deal but can prove it quickly as well.
In summary, with leasehold premiums generally being under £100,000 for the types of businesses that we sell a buyer will know what level of funds they require to not only pay for the asking premium but to also cover any legal and survey fees as well as paying for stock at valuation, refurbishment and working capital to run the business from day one.