buying

How to Acquire a Company Using a Leverage Buyout

September 26, 2008 By Schwabe 29 comments

How can you buy a business with no cash of your own? It's actually simpler than you might think. And surprisingly few people know about the strategy - so I'm going to spill the beans on this arcane method right now.

Business buyout

The way you do it, is by leveraging the assets of the specific business you want to buy: at about exactly the same time you buy that business.

It's called a full leverage buyout: acquiring a company by using the assets and cashflow of that company to finance the purchase.

Although the strategy is generally unknown to most internet nerds and even general business owners: big corporations have been doing it for a long time. And the strategy has become an accepted and widely practiced financing strategy.

But nevermind the big corporations. For the small business owner or an individual starting with little or nothing: leveraged buyouts can effectively help you skip the 2 to 5 years it generally takes to build a strong company.

Nerd Business