Buying a Business: How Much Cash Do You Really Need? (It's More Than the Deposit)

Probiz Finance · October 2026

Most buyers plan around one number: the deposit. But the cash a business purchase needs runs from the day you start due diligence to the first few months after you get the keys. This guide maps that full cash picture, item by item, and shows which parts usually come from your own pocket and which may be fundable, subject to lender assessment.

Why is the deposit only part of the cash picture?

The deposit, or your contribution, is the amount you put towards the purchase price. It matters, but it is only one of several calls on your cash. Some costs arrive before you know whether the deal will go ahead. Others land at settlement. Many only show up once you are running the business and paying wages, rent and suppliers in your own name.

It helps to think about the cash in three stages:

The full cash picture, item by item

1. Your contribution

Lenders generally expect a buyer to put some of their own money towards a business purchase. How much depends on the business, the lender and your position, including how much of the price is goodwill. Our guide to buying a business covers this in its section "How much deposit do you need to buy a business?", so we won't repeat it here. For this guide, the point is simple: your contribution is the first call on your cash, not the only one.

Goodwill is the part of the price you pay for the business's reputation, customers and future earnings rather than its physical assets. It is generally harder to finance than tangible assets because there is less a lender can recover if things go wrong. The same guide explains this in "Can goodwill be financed?".

2. Due diligence and professional fees

Before you commit, you will usually need an accountant to review the financials and tax position, and a solicitor to review the sale contract and the lease. Depending on the business, you may also need a valuer, a stocktaker or an industry specialist. These costs are typically paid before finance is in place and before you know for certain the deal will proceed, so plan to cover them from your own cash. Fees vary, so ask for quotes early.

Our article on due diligence and business finance explains how what you find affects lending, and the business acquisition due diligence checklist helps you work through it.

3. Lender and establishment costs

Business loans can carry application, establishment, valuation, legal and security-registration costs. Which ones apply, and how much they are, varies by lender and product. Ask for the full costs in writing, and check which are payable upfront and which are due at settlement, so none of them come out of the cash you set aside for running the business.

4. Stock at settlement: what "+ SAV" and "WIWO" mean

Business listings in Australia often show the price in one of two ways, and the difference changes how much cash you need on settlement day.

"+ SAV" (plus stock at valuation) means the advertised price does not include stock. The stock is counted, usually close to settlement, and paid for on top of the price. It is commonly valued at cost, and the sale contract sets out how damaged, slow-moving or out-of-date stock is treated. Until the stocktake, the stock figure is an estimate, so it can move.

"WIWO" (walk in, walk out) means the price already includes the stock and contents. There is usually no separate stocktake.

5. Day-one working capital

Working capital is the cash a business needs to cover its day-to-day costs while it waits to be paid. From your first day as owner, wages, superannuation, rent, utilities and supplier bills fall due on their normal timetable. Customer payments may not arrive as quickly, particularly if the business offers credit terms.

Two things often catch new owners out. First, supplier accounts may need to be set up again in your name, and a supplier may not offer a new owner the same credit terms straight away. Second, super is now paid with each payday rather than quarterly, so the first payroll carries its super with it. Our article on working capital, wages and Payday Super explains the timing.

A simple way to plan is to map the first 90 days: what goes out each week, what comes in, and when. A working-capital facility may help with the gap, subject to lender assessment, but it is worth knowing the size of the gap before you rely on one.

6. Tax from day one

When you buy a business, you take on your own tax obligations from the start. The seller's ABN cannot be transferred to you, so you will need your own. Depending on the business, you will also need to register for GST if required, register for PAYG withholding if you will pay employees, and lodge business activity statements (BAS).

The cash point is this: GST you collect and tax you withhold from wages are amounts you will need to pay on. Set them aside rather than treating them as spending money. Your accountant can confirm which registrations and lodgement cycles apply to you.

7. Duty

Duty may apply when you buy a business. It varies by state and by what's being bought, so check with your solicitor or accountant early. That way it sits in your cash plan from the start rather than appearing as a surprise close to settlement.

8. A buffer for the handover period

The first months of ownership rarely go exactly to plan. Customers may test a new owner, a key staff member may leave, equipment may need repairs, or something may surface that due diligence did not catch. A buffer is cash you keep in reserve and do not commit to the purchase. How much is sensible depends on the business, so it is worth discussing with your accountant.

Does buying the freehold change how a business purchase is financed?

Yes, it can. If you are buying the business only and leasing the premises, lenders will look closely at the lease: how long is left, whether there are options to renew, and whether it can be transferred to you. If you are buying the property as well, the total amount you are funding is larger, the property itself may provide security, and lenders will usually assess the business and the property together.

A commercial property loan may form part of the structure in that case. We explain how this works in our article on commercial property loans for business acquisition.

Own cash or fundable? Your cash-picture worksheet

Use this table to map each item before you make an offer. "May be fundable" means some lenders may finance it, subject to assessment of the business, the deal and your circumstances. It does not mean it will be funded.

How can the funding for a business purchase be split?

A business purchase is not always funded by one loan. Depending on what is being bought, the structure may combine:

• A business acquisition loan for the purchase of the business itself.
• Equipment or vehicle finance for assets included in the sale.
• A working-capital facility for day-to-day cash flow after settlement.
• A commercial property loan if you are buying the premises too.

Equipment finance can be more than a way to pay for an asset. When structured appropriately, it can help a business preserve working capital. Splitting the funding may leave more of your own cash for the items that usually cannot be financed, but the right structure depends on the business, the deal and lender criteria. Our business acquisition finance page explains how we help buyers work through this.

What do lenders look at when you buy a business?

When a lender assesses an acquisition, it is not only asking whether you can complete the purchase. It wants to know whether the business can carry its commitments once you own it. Our due diligence article covers five factors in detail:

1. Cash flow and serviceability: whether the business's earnings can comfortably meet the repayments.
2. Customer concentration: how much revenue depends on a small number of customers.
3. Owner dependence: whether the business can run without the current owner.
4. Asset mix: how much of the price is tangible assets versus goodwill.
5. Lease and contract terms: how secure the premises and key contracts are.

What should you do before you make an offer?

Finance planning should begin early when buying a business, rather than being left until the transaction is almost complete. Before you make an offer:

1. Map the full cash picture using the worksheet above, with quotes and estimates where you have them.
2. Test the loan side with our acquisition calculator. It gives an indicative loan and deposit; this guide covers the rest.
3. Talk to a broker early about how the funding could be structured, and which items may be fundable for your situation.

Frequently asked questions