Buying a business: the funding countdown to settlement day

Buying an established business is a string of deadlines tied to a single date. The contract fixes settlement day. Everything else — the funding, the lease, the licences, the stock count, your own registrations — has to be finished by then, or the handover slips. And on settlement day itself, the final figure often isn’t known until the stock has been counted.

This guide builds a countdown from the day you sign to the day you get the keys, with the funding milestones marked.

What happens on settlement day?

On settlement day, the balance of the purchase price is paid, ownership of the business assets passes to you, and you take over the running of the business. The final amount usually includes adjustments — most often stock on hand, which is commonly counted and valued close to settlement, plus prepaid or accrued expenses such as rent or utilities.

business.gov.au’s guide to buying an existing business sets out the steps before that point: checking you’re business-ready, researching and valuing the business, doing due diligence on its records, contracts, licences, equipment and liabilities, and making an offer through a written contract that sets out the price and payment method.

The countdown

As soon as the contract is signed

• Lock in the settlement date and note whether it’s a business day. Weekends and public holidays can’t be settlement days for most payment and property processes.
• Apply for funding now, not later. Bank approvals can take weeks. If you’re using property as security, valuations and documents take time too.
• Request landlord consent to transfer or assign the lease. This is often the slowest third-party step, and many businesses can’t trade without their premises.
• List every licence and permit the business needs and check how each transfers. business.gov.au stresses confirming the business holds all the correct licences and permits and that they’re current.

Four to three weeks out

• Set up your own entity and registrations. Your ABN belongs to your entity, not the seller’s. Use ABN Lookup to check your details are exactly right, and if you’re buying through a company, make sure its ASIC details are up to date.
• Sort out GST. If the sale is structured as a going concern, the ATO’s conditions are that the sale is for payment, you’re registered or required to be registered for GST, and both parties agree in writing that it’s a going concern. Get this right before settlement, not after.
• Open your business bank account and set up payment methods for customers.
• Agree the stock count method — who counts, when, and how it’s valued.

Two weeks out

• Confirm funding is approved — unconditionally if possible — and what’s still needed to release it.
• Check the lease consent is progressing, and chase if needed.
• Plan staff arrangements with advice on employment obligations for any employees transferring.
• Arrange utilities, insurance and supplier accounts in your name from settlement.

Final week

• Get a draft settlement statement showing the price, deposit and estimated adjustments.
• Estimate the stock adjustment and make sure your funding covers a range, not a single figure.
• Confirm payment details for the seller’s side in writing, and verify any changes by phone.
• Line up everyone who needs to sign on settlement day.

Settlement day

• Stock count and final figure confirmed.
• Balance paid and ownership transferred.
• You open the doors under your name.

What if the funding falls short at the last minute?

It happens more often than buyers expect. The bank’s loan is approved but won’t be ready until after settlement. The stock count comes in well above the estimate. A seller’s adjustment wasn’t in the draft statement. Suddenly there’s a gap and a fixed date.

This is where short-term funding can bridge — for days or weeks until the long-term loan arrives. Property-secured loans from $20k to $250k are possible the same day, and up to $5m is possible within 24–48 hours, when paperwork and signatories are ready. The 24-Hour Funding Clock shows how much room your settlement date leaves, and the cut-offs and holidays page explains why a Monday settlement really means acting the week before.

The key is a clear exit: the bank loan, a sale of surplus stock, or trading income. If a gap is emerging, start a 60-second enquiry as early as possible — a gap spotted two weeks out is easy to fix; a gap spotted on settlement morning is a scramble.

How much funding room should you allow for stock?

There’s no universal answer, because stock levels vary with the season and the seller’s ordering. A sensible approach:

Item	How to estimate it	Risk
Stock on hand	Recent stock reports and seasonal patterns	Can move a lot in the final weeks
Prepaid expenses	Rent, rates, subscriptions paid in advance	Usually small and predictable
Employee entitlements	Depends on your contract and staffing arrangements	Get professional advice
Deposits held	Customer deposits for undelivered orders	Often forgotten

Build a buffer on top of your best estimate so a higher count doesn’t derail the day.

Illustrative example: the café purchase

Illustrative scenario only. A couple buys a Sunshine Coast café with settlement set for a Wednesday. Their bank loan is approved, but the bank’s settlement date is the following Monday. The contract can’t be moved without the seller’s agreement, and the seller has already booked a move interstate.

Twelve days out, they arrange a short-term loan against their home to cover the gap. A desktop valuation is enough, documents are signed within the week, and funds are ready well before the Wednesday. They settle on time, and the short-term loan is repaid when the bank loan comes through five days later.

Which third parties can hold up settlement?

Most settlement delays on a business purchase come from people outside the deal, not the buyer or seller. It helps to know who they are and to contact each one early:

• The landlord — consent to assign or grant a new lease, often through an agent or solicitor.
• Your lender — conditions to clear and documents to sign before funds are released.
• Licensing bodies — liquor, food, health, transport or trade licences that must be transferred or reissued.
• Franchisors — approval of you as the new franchisee, plus any training they require.
• Key suppliers — new trading accounts, credit applications and delivery arrangements in your name.
• Equipment financiers — if any equipment is financed, the seller’s finance needs to be paid out or transferred.

Put each one on your countdown with a named contact and a date you expect an answer. If any of them is running late two weeks out, tell your solicitor or conveyancer straight away — a slipping third party is much easier to manage with notice than on the morning of settlement.

A final check the day before settlement

The evening before, run through a short list: funds confirmed and ready to release, payee details verified by phone, the stock count arranged, keys and codes to be handed over, your insurance starting at settlement, and every signatory reachable in the morning. Five minutes here saves hours on the day.

Settle on time, then enjoy the business

Buying a business is exciting, and it should feel that way on handover day — not like a race against a bank’s calendar. If there’s any chance of a funding gap at settlement, it pays to have a plan B lined up early. The enquiry takes about 60 seconds, and there’s no credit check when you first enquire. Your details stay with one team — there’s no spray-and-pray to a list of lenders — and a real person looks at your settlement date, your security and your long-term funding before suggesting anything. Please fill in the form accurately, including the settlement date, so any bridging plan is built around the right day.

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