The instant asset write-off is a temporary tax deduction scheme available for all businesses with an annual turnover of less than $5 billion.

It allows eligible businesses to claim an immediate tax deduction for the full cost of qualifying asset that are installed or in use by June 30, 2022.

Under the scheme, businesses can claim for the full cost of an asset up to $150,000. For small businesses, the scheme includes both new and second-hand assets. As long as each purchase is under the threshold, there are no limits on the number of assets that can be claimed.

How to Access Finance to Buy a Business

Before you contact a lending provider, there are three main factors you need to consider:

The Amount You Need to Borrow

Conduct a realistic assessment of the capital you need to complete the purchase, and the funds you need to ensure a smooth transition after. If you don’t secure enough finance, you can struggle to maintain operations after you take over the business. You’ll need to obtain a second line of credit, and you’ll end up paying a higher interest rate. If you borrow too much, you can end up paying interest on finance that you don’t need.

Create a Detailed Business Plan

You should be able to show a lender how the business will manage outgoings, and how the business will generate enough revenue to stay profitable. Do your research and be prepared to show lenders how you will repay the amount that you borrow.

Establish a Repayment Timeline

You should have a set-out schedule for the amount of time you will need to pay off the finance. This will include the amount you will be able to afford to pay back each month, and whether that amount will be fixed or increased as the business increases in size and becomes more profitable.

How Lenders Assess Finance Applicants

When you apply for a finance, lenders will consider four main factors:


A potential lender will look for evidence that you are capable of running a profitable business. If you have experience in business, you will be a more viable candidate for finance. The more experience you have in the specific industry, the more likely you will be able to access a line of credit. If you lack experience, lenders will see you as more of a risk, and you’ll usually have to pay a higher rate of interest if you are able to secure finance.

Business Plan

A detailed business plan will help you to secure the finance you need. It will illustrate to the lender what you are aiming to achieve, how you will make a profit, and how you will afford to repay the money borrowed.

It should detail your estimated costs and profits, and how you plan to increase revenue and grow the business over time. Make sure that you are clear about your goals, and that estimated profits and business performance are realistic.


The lender might want to see that you have assets to cover the cost of the finance if you can’t afford to make repayments. They will look at your credit rating, current finances, and the financials and assets of the business that you intend to purchase.

Asset financing is a funding solution that enables you to use the assets of the business you want to purchase as collateral to secure finance. If the company has assets of significant value, we can help you to access the funding you need to buy the business.


The lender will look at the industry of the business you want to purchase. An industry with lots of potential growth is more attractive than a sector that is shrinking or considered to be riskier. If the industry is considered too volatile, you may struggle to secure finance – even if the business is currently profitable.

How Much Finance Can Be Accessed

The amount you are able to borrow depends on several factors. The lender will assess the business valuation, your business plan, projected earnings, and your credit history to determine the amount you can borrow.

Lenders want to see that you are able to repay the money borrowed. If you can demonstrate a history of paying back credit, lenders will allow you to borrow more than somebody with no credit history.

If the business you want to buy has healthy cash flow and lot’s of assets, it is seen as less risky for the lender, and you are more likely to be able to secure finance.

For more information on the types of business funding available and how to choose the best solution for your needs, check out our free FitsMe Essential Guide to Business Funding.

Finance Options for Buying an Existing Business

It’s possible to secure financing from a partner or investor, but you will need to surrender a percentage of your business and future profits.

The easiest way to get funding is to secure finance from a bank or an alternative lender.

Financing your business purchase this way enables you to remain in full control of the business. You borrow money to purchase the company and repay the sum borrowed with interest over an agreed period.

Business Finance
If you are buying a business that owns significant assets, it’s possible to secure finance by borrowing against the value of those assets.

Invoice Finance can be used to access the cash tied up in a debtors ledger, and equipment finance can be utilised to access up to 100% of the value of the business’s equipment and machinery assets. ScotPac can help you to leverage the assets of the business you want to purchase to secure a line of credit to fund your takeover.

Asset finance providers don’t follow the strict lending criteria that traditional banks use. The increased flexibility means that finance can be secured much faster.

Secured Business Loans
Secured loans are one of the most common types of financing for buying a business. Loan providers will have lending criteria that you will need to meet to be able to borrow money for the business purchase. Due to the strict lending criteria, secured business loans can take a long time before you are approved.

To qualify for a secured loan, you’ll need to have some assets that can be used as collateral. The lending provider will also want to see your business plan, the financials of the business you wish to purchase, and a detailed assessment of the business’s industry, customers, and projected profits.

Unsecured Business Loans
Unsecured loans are usually easier to access than a secured business loan. This type of loan isn’t secured against the assets of the business, and will usually require a personal guarantee from the loan applicant. This means less risk for you as the borrower, but more risk for the loan provider. You will usually have to pay a higher rate of interest than a secured loan.

Peer-To-Peer Lenders
Peer-to-peer lending, also known as “crowd” or “social” lending, is facilitated through an intermediary platform that connects borrowers with lenders.

The lenders can be venture capitalists or individuals looking to invest their money. The peer-to-peer platform connects lenders with suitable borrowers that are looking to secure finance. The total amount you borrow is made up of lots of smaller amounts from multiple lenders.

Peer-to-peer lending works similarly to a traditional business loan. You borrow a set amount of money and repay the loan in full plus interest over a set period.

Budget for Closing Costs

The price of the business isn’t the only cost involved in completing the purchase. You’ll also need to cover closing costs, including escrow fees, taxes, legal fees, accountant fees, etc.

All of these fees need to be taken into account. As a rough guide, you should budget up to 10% of the purchase price for closing costs.

Financing Business Operations

Once you have signed on the dotted line and purchased the business, you’ll need enough funds to ensure a smooth transition and keep the business fully operational. If you plan to upgrade or expand any parts of the company, you should consider adding those costs to the amount you wish to borrow.

According to the Australian Bureau of Statistics, 24% of businesses report that a lack of access to additional funding is a barrier to business performance:


For smaller companies with 0-4 employees, 15% report a lack of access to funds as a barrier to business performance. Access to funding is crucial for maintaining cash flow and fueling+ business growth. Scottish Pacific offers a range of financing solutions to help you purchase a business and secure a cash flow injection to drive the business forward once you take over.