How to buy a business with no money: the acquisition model explained

You can buy an established business without your own money through seller finance, earn-outs, asset-based lending, investor backing or a funded acquisition programme. This is called the acquisition model: buying a business that already has customers, income and systems, instead of building one from scratch. The challenge is usually funding, which is why funded acquisitions are growing.

Here’s how the acquisition model works, the realistic ways to fund a purchase, and how funded acquisitions help people buy established lettings businesses.

Key takeaways

• The acquisition model means buying a business that’s already trading, rather than starting one.
• Buying gives you customers and income from day one, but it usually needs significant capital.
• Seller finance, earn-outs, lenders and funded programmes can reduce or remove the need for your own money.
• “No money” rarely means no cost. Expect fees, due diligence costs and approval criteria.

What is the acquisition model?

The acquisition model is a way to become a business owner by buying an existing business instead of building one. You take over its revenue, customers, systems, brand and often its staff. In effect, you’re buying momentum.

Why buy a business instead of starting one?

• Income from day one: the business is already trading.
• Lower risk: you can see real figures before you buy, rather than relying on forecasts.
• Proven demand: the customers already exist.
• Systems and people in place: you’re not building everything yourself.
• A base to grow from: you can improve and expand something that already works.

Can you buy a business with no money?

Sometimes, yes. Most people can’t fund a purchase themselves, so buyers use other people’s money. The main routes are:

1. Seller finance

The seller lets you pay part of the price over time, from the business’s profits. Sellers who want a smooth handover or the best overall price often agree to this.

2. Earn-outs

Part of the price depends on how the business performs after you take over. It lowers the upfront amount and shares the risk with the seller.

3. Lenders and asset-based finance

Banks and specialist lenders may lend against the business’s cash flow or assets. Most want some deposit and a solid business plan.

4. Investors and partners

An investor provides the capital in return for a share of the business or its profits, while you run it.

5. Funded acquisition programmes

Some franchise and business networks fund acquisitions for their members. You join the network, and it funds or arranges the purchase of an approved business, subject to due diligence.

Whichever route you take, “no money” rarely means no cost. Expect legal and due diligence fees, and criteria you’ll need to meet.

What is a funded acquisition in property?

In property, a funded acquisition usually means buying an established lettings or property management business with financial backing. Lettings businesses suit the acquisition model well because they earn recurring monthly management fees from every property they manage. You take over:

• Managed properties and the monthly income they produce
• Landlord relationships
• Staff, systems and processes
• A local brand and reputation

Read more about how much letting agents make.

How a funded acquisition works, step by step

1. Assessment: check the model fits your goals and experience.
2. Onboarding and training: learn how to run a lettings business.
3. Find and match a business: identify an agency for sale that fits.
4. Due diligence and funding: check the figures, contracts and compliance, and structure the funding.
5. Acquisition and handover: complete the purchase and take over the running of the business.

Our guide to how to buy a letting agency in the UK covers each step in detail.

How Sourced Living approaches funded acquisitions

Sourced Living is a lettings franchise. Partners get the training, systems and support to run a professional lettings business, and can buy an established lettings business with up to 100% acquisition funding, subject to approval and due diligence. You do need to join Sourced Living first.

It’s already working for Partners:

• John completed the acquisition of a business with 262 managed properties just 49 days after induction. The £450,000 purchase was 100% funded by Sourced.
• Sara grew her own business to 33 properties, then acquired a Devon agency that took her to 408.
• Dan took over a lettings business turning over around £425,000 a year.

Frequently asked questions

Can you buy a business with no money?

In some cases. Seller finance, earn-outs, investors and funded acquisition programmes can reduce or remove the need for your own capital, though fees and approval criteria usually apply.

What is the acquisition model in business?

Buying an existing business that already has revenue, customers and systems, rather than starting a new one.

Is buying a business less risky than starting one?

It can be. A business with proven income and systems usually carries less uncertainty than a new launch, but you still need thorough due diligence.

What is a funded acquisition?

Buying a business with financial backing from a lender, investor or programme, rather than your own money.

How long does an acquisition take?

It varies. Many complete within a few months, depending on due diligence and funding.

Own an established lettings business

Join Sourced Living and buy an established lettings business with up to 100% acquisition funding, subject to approval.

Explore funded acquisitions