Selling your business? Bridging until the sale proceeds arrive

Selling a business is rarely a single moment. There’s the handshake, then heads of agreement, due diligence, the sale agreement, the landlord’s consent to assign the lease, licence transfers, the stock-take, the handover period, and finally settlement. Some deals include deferred payments or an earn-out after that. Each step is reasonable. Together they can take months.

Meanwhile, life after the sale has its own timetable. The next business you want to buy won’t wait. A debt has to be cleared. A partner needs paying out. That’s a gap between two events: Event A, when you need the money, and Event B, when the sale settles and the proceeds arrive.

What can a business sale bridge fund?

For business purposes, commonly:

• Buying your next business or premises before the current sale completes.
• Paying out a partner or investor as part of the restructure.
• Clearing a tax debt or a lender that needs to be settled before or at completion.
• Working capital to keep the business in good order through handover, so the buyer isn’t given a reason to renegotiate.

It can’t fund personal spending unrelated to the business. Business purposes only.

How strong is a business sale as an exit?

That depends on how far the sale has progressed. The business.gov.au guide to selling your business sets out the steps, from agreeing price, deposit and settlement period through to the contract and transfer. The closer you are to the end of that list, the firmer the exit.

Sale stage	Exit strength
Buyer interested, no documents	Weak; treat as a plan
Heads of agreement signed	Moderate; still largely non-binding
Sale agreement signed, conditions outstanding	Good; the conditions are the risk
Unconditional, settlement date set	Strong

Lenders will also ask whether the buyer’s funding is in place, and whether the landlord has agreed to the lease assignment, because those are the two most common reasons sales stall.

What evidence should you prepare?

1. The sale agreement, including price, deposit, conditions and settlement date.
2. Status of each condition: buyer finance, landlord consent, licence transfers, due diligence.
3. Your accountant’s estimate of net proceeds after broker fees, legal costs, employee entitlements, stock adjustments and tax. The ATO’s guidance on small business CGT concessions may reduce the tax, so it’s worth asking early.
4. Details of any deferred or earn-out payments, which are usually treated separately from the main exit.
5. Property security details, including existing loans.

Our exit evidence checklist sets these out by exit type.

Sale agreement signed and something else can’t wait? Talk to us about bridging to settlement with a short enquiry.

An illustrative example

A couple who own a café and the freehold building it trades from have sold the business, but not the building, which they’ll lease to the buyer. The sale agreement is signed, subject to the buyer’s finance and a liquor licence transfer, with settlement expected in ten weeks. They want to buy a larger café in another suburb that has a firm settlement date in five weeks.

A bridge secured over the freehold building funds the new purchase. When the café sale settles, the proceeds repay the bridge. They take a term of five months, because a licence transfer delay could push the sale settlement back. They also check that, if the buyer’s finance fell through, the freehold equity alone would support a refinance of the balance. (Illustrative scenario.)

What if the business sale falls over?

Then the exit becomes a new sale, a refinance or another asset. That’s the plan B lenders want to hear about before they lend. Our page on what happens if a sale doesn’t go through applies to business sales as much as to property. You can also test your plan with the exit strength check before you enquire.

If the gap is between buying new premises and selling old ones, buying before you sell covers the property side of the same move.

What about deferred payments and earn-outs?

Many business sales include part of the price after settlement: a deferred instalment, a vendor finance arrangement or an earn-out tied to future performance. These can be valuable, but they’re treated differently from the settlement amount.

• Deferred instalments with a fixed amount and date are the stronger of the three, especially if secured.
• Vendor finance, where you lend part of the price to the buyer, depends on the buyer’s ability to pay you.
• Earn-outs depend on how the business performs after you’ve left, and are the most uncertain.

For bridging purposes, lenders usually size the bridge against the amount paid at settlement and treat anything later as a bonus. If your plan relies on a deferred amount, say so up front so it can be structured properly.

Move on to what’s next without waiting for the last signature

If you’ve done the hard work of selling, the timing of the final payment shouldn’t hold back your next move. Tell us about the sale, the settlement date, what you need the money for and what property you can offer. It’s a 60-second enquiry with no credit check when you first enquire. Your details stay with one team instead of being sprayed out to lenders, and a real person calls you to talk it through.

Be as accurate as you can about the sale price, the conditions still outstanding and your existing loans. It helps us get the structure right on the first call.

Bridge to your business sale →