Newsagency Finance

How we can help you purchase a newsagency

With many years industry experience Professional Finance Brokers can assist secure finance and structure a Newsagency Finance Package tailored to reflect your own individual circumstances. 

More importantly our specialist brokers can assist you understand your spending limit with an indication on what price newsagency you may be able to afford and help guide you through the newsagency purchase process.

Things you need to consider when buying a newsagency

• When considering your finance requirements, you will firstly need to establish how much cash you have to invest and what personal assets you are prepared to provide to secure any loan. 
• The total amount you can borrow will depend on the amount of future maintainable income generated by the business you are purchasing and your ability to meet all your commitments including loan repayments, living costs and tax from this income. 
• When determining how much you can borrow you will need to allow between 10% and 15% of the total purchase price to meet all associated start-up costs which include government stamp duty, legal fees, accountant fees, bank fees and other regulatory and licensing costs.

Loan Structure

The process of loan structuring begins after you have identified your financing requirements. Ensuring your loans are structured correctly will provide you with the freedom to operate your business within acceptable agreed credit risk boundaries. The first step in the structuring process is to determine the right borrowing entity and an early visit to your accountant and lawyer can assist here. Most accountants and lawyers will provide a structure depending on your own individual circumstances after considering tax implications, asset protection and exit strategies. 

Once your borrowing entity has been determined it is important to establish the correct loan structure to mitigate any specific credit risks. Loan structuring is one-way lenders differentiate their credit facilities from those of their competitors. When purchasing a newsagency some common financing issues which will impact on your loan structure are as follows;

• Loan Terms
  • Normally reflect what security is provided.
    • Residential security (Longer loan term)
    • Business security (Shorter loan term)
    • If business security is provided, normally the loan term will need to align with the lease terms.
    • Is a Right of Entry or Mortgage over Lease available?
• Is a business valuation or due diligence required?
• Are Bank Guarantees required for rental and publisher bonds?
• What are your working capital requirements?
• Is 100% debt funding required?
• Repayment amounts and frequency.
• What ongoing financial covenants will be applicable and can they be met

Ensuring your loan is correctly structured is not only important in mitigating the lenders credit risk it is important to ensure you have the flexibility in your finance arrangements to allow your business to be successful now and in the future.