Below are some options to consider for raising capital when purchasing a business:
When I started my first business we sold a car and liquidated our savings.
Over time your home may have equity available to secure a second mortgage.
You may have a relative that would be willing to provide a loan so that you may start your business. One of the businesses I started involved a guarantee from a relative; he allow a second mortgage to be placed on his home to guarantee a bank loan.
It is rare when a business owner has all the skills necessary to own a business. You will either have to hire employees or bring on partners with different skill sets and financial assets in order to start a business.
The Small Business Administration understands that small businesses are the engine of our economy and therefore the SBA provides government backing to banks that lend to businesses. The bank will underwrite the loan with a partial guarantee from the SBA.
If you have a solid track record, and are willing to personally guarantee a bank loan, this may be a good option for you.
In some cases a business seller will finance a loan to a trusted buyer.
If you are willing to give up equity in your business a private investor or investor group could be an option for you.