No Australian lender publishes a fixed deposit for a business purchase, because the number is driven by security rather than by price. Where the deal is backed only by the business itself, buyers are typically asked for a substantial cash contribution. Where residential or commercial property is available as security, the required contribution falls sharply.
The short version
- No Australian lender, regulator or government body publishes a standard deposit percentage for buying a business. Every percentage circulating online is an unsourced estimate.
- Lenders size a business acquisition facility against the security available, not against the purchase price.
- Goodwill cannot be sold separately from the business, so the part of the price that is goodwill is the part lenders will not lend against on its own.
- Plant, equipment and vehicles can often be financed separately, which reduces the cash needed at settlement.
- Property security usually lowers the cash contribution and improves pricing, and it puts that property at risk. Both are true and both belong in the decision.
Why does nobody publish a deposit figure for buying a business?
Because a business purchase is not priced like a house. A home loan is secured by an asset the lender can value and sell. A business purchase is mostly goodwill, which cannot be sold separately from the business, so the lender sizes the loan against whatever security exists rather than against the purchase price.
This article does not give you a single number, and that is deliberate. We checked business.gov.au, ASIC MoneySmart and the major bank business lending pages. None of them publishes a typical deposit or equity contribution for a business acquisition. The percentages you will find on broker blogs and forum threads are estimates, not sourced figures, and they are usually presented as though they were market standard.
The distinction that makes sense of it is between a purchase price and a lender's security position. The purchase price is what you and the vendor agree. The security position is what the lender could realise if the business stopped trading tomorrow. On a business sale those two numbers are often very far apart, because a large share of the price is the customer list, the contracts, the reputation and the systems. Those things have real commercial value and almost no realisable value to a lender holding them alone.
So the honest answer to how much deposit you need is that it depends on what you can offer as security, and the rest of this page is about what actually moves that number.
What actually determines the deposit a lender asks for?
Four things: what security you can offer, how much of the price is goodwill rather than tangible assets, whether the business has verifiable maintainable earnings, and your own experience in that industry.
Security available. This is the largest single lever. Residential or commercial property changes the assessment completely, because the lender is lending against something it can value and realise. A general security agreement over the business alone does not do the same work. Secured versus unsecured business lending sets out how differently the two are assessed.
The mix of goodwill and tangible assets. A business selling for $500,000 that includes $200,000 of trucks, plant and fit-out is a different proposition from one selling for $500,000 where the assets are a laptop and a client list. The tangible portion can often be funded through asset finance or a chattel mortgage against the equipment itself, which takes that slice out of the cash you need to find. Asset-based lending covers the broader version of the same idea, where debtors and stock also carry weight.
Verifiable maintainable earnings. Lenders want earnings they can trace through the financial statements and the bank accounts, not an adjusted figure supplied by the vendor's broker. Add-backs that cannot be substantiated tend to be stripped out, which lowers the earnings the lender will lend against and raises the contribution expected from you.
Your experience in that industry. A buyer with ten years running a similar operation is assessed differently from a first time owner entering an unfamiliar trade. It will not replace security, but it does affect how the file reads.
One structural point sits underneath all four. A lease is not a freehold. If the business you are buying operates from leased premises, the lease term, the options and the assignment terms all matter to the lender, because a short remaining term can undermine the earnings the whole valuation rests on.
How does the deposit change when you have property to offer?
Property security changes the arithmetic completely. A lender assessing a property-backed facility is lending against an asset it can value and realise, so the cash contribution needed from the buyer falls, and the pricing usually improves at the same time.
| Security position | What the lender is lending against | What typically gets financed separately | What that leaves the buyer to find |
|---|---|---|---|
| No security beyond the business | Cash flow and the buyer's covenant | Little. Most of the price sits in goodwill | The largest contribution of the three, and often the deal does not proceed at all |
| Business assets only | Plant, equipment, vehicles and in some cases debtors and stock | Equipment via chattel mortgage or asset finance | The goodwill component, less whatever vendor terms are agreed |
| Residential or commercial property available | The property, valued and realisable | Equipment can still be split out to preserve borrowing capacity | The smallest contribution of the three, with better pricing |
The percentages are deliberately absent from that table. Any figure we put in it would be invented, and an invented number in a lending decision this size is worse than no number.
The risk belongs in the same passage as the benefit, not in a footer. Offering the family home as security means the family home is exposed if the business does not perform as expected. Business acquisitions carry integration risk, key person risk and the plain risk that the earnings you bought do not survive the change of owner. Property security is not simply the better option. It is the cheaper option with the larger downside, and that trade is yours to make.
What counts towards your contribution besides cash?
Vendor finance, a deferred or earn-out component, equipment financed separately, and in some cases stock funded on trade terms can all reduce the cash you need on settlement day. Whether a lender treats them as your contribution or as additional debt varies.
Vendor finance is the most common of these. The vendor leaves part of the price outstanding, usually repaid over one to three years, sometimes tied to the business hitting agreed numbers. Lenders differ sharply on how they treat it. Some regard a subordinated vendor note as equity-like and count it towards your position. Others treat it as debt that has to be serviced alongside theirs, which reduces what they will advance. Ask the question before you structure the offer, not after.
An earn-out works similarly and has an additional benefit: it moves some of the risk of the earnings not holding up back onto the vendor, which is exactly where the information about those earnings sits.
Equipment financed separately is the cleanest of the four. If $150,000 of the price is vehicles and plant, funding those through a chattel mortgage against the equipment leaves the main facility to deal with the rest.
Stock on trade terms is available in some industries and not others. It is worth asking, and it is not something to assume.
We will link the full breakdown of vendor finance structures here when that page is live in week two.
Does the industry you are buying into change the number?
Yes. Industries with strong tangible assets or transferable contracted income are funded more readily than service businesses whose value walks out the door with the owner.
Transport and logistics businesses come with trucks and trailers that a lender can value, register on the Personal Property Securities Register and realise. Manufacturing and engineering carry plant. Childcare, medical and allied health practices carry licences, fit-out and, in many cases, contracted or recurring income that survives a change of owner.
At the other end, a consultancy, an agency or a trades business built entirely around the outgoing owner's relationships is the hardest case. The earnings are real, and the lender's ability to secure against them is close to zero. That is not a reason not to buy one. It is a reason to expect the funding structure to lean much harder on your own contribution, on vendor finance, or on outside security.
Hospitality sits in between and depends heavily on the fit-out, the lease and whether the trading history is verifiable through the point of sale and banking data rather than through what the vendor says.
What should you do before you make an offer?
Establish your security position and your realistic funding capacity before you sign anything, because a finance clause is only useful if you know what you can actually fund.
A practical order of operations:
- Write down what security you can genuinely offer, and what you are willing to offer. Those are two different lists.
- Split the purchase price into tangible assets and goodwill. Ask the vendor or broker for the asset schedule with written down values.
- Get three years of financial statements and the matching business activity statements, and check that the earnings story is traceable through the bank accounts.
- Check the lease: remaining term, options, assignment conditions and any make good obligation.
- Understand what documents a lender will ask for, and have them ready. What lenders actually require on a business loan application covers the standard list.
- Only then put a finance clause in the contract, with a period that reflects how long the assessment realistically takes.
Lenders typically assess acquisition finance case by case, so the useful preparation is not chasing a percentage. It is knowing your security position well enough to have a specific conversation. We will link the pre-approval post here once it is live in week two.
The single next step: split the price into tangible assets and goodwill, and list what security you hold against each. That one page tells you more about your funding position than any published percentage would.
This is general information, not financial advice. It does not take your circumstances into account and it is not an offer of finance or an indication that finance is available. Funding Loop is a finance marketplace: we work with a panel of lenders and the assessment criteria differ between them.
Sources: Australian Bureau of Statistics, Counts of Australian Businesses, cat. 8165.0, released 18 August 2026, which records 2,814,778 actively trading businesses at 30 June 2026, of which 996,203 were employing businesses, with 460,461 entries and 375,331 exits across 2025-26. business.gov.au guidance on buying a business; ASIC MoneySmart. Checked 26 August 2026.
Last reviewed: August 2026.
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