How much deposit do I need to buy a business in the UK?

Most UK lenders want 20 to 40% of the price as buyer equity. The exact figure moves with the lender, the sector and how much of the price the seller is willing to defer.

5 min readUpdated October 2026Author: Dealdoor Research

Dealdoor is a UK marketplace for buying and selling small and medium-sized businesses.

Abstract The short answer What moves the figure within that range Reducing the cash you need at completion What usually does not count as deposit

Abstract

What UK lenders typically require as buyer equity on an SME acquisition loan, what moves the figure up or down, and how seller-deferred consideration changes the cash needed at completion.

Suggested citation: Dealdoor Research (2026). How Much Deposit Do I Need to Buy a Business in the UK?. Dealdoor. Available at dealdoor.co.uk/guides/deposit-needed-to-buy-a-business-uk

1.The short answer

Most UK high street lenders want to see 20 to 40% of the purchase price funded by the buyer before they will lend the rest against an acquisition. On a £400,000 business, that is typically £80,000 to £160,000 in cash or other equity, not borrowed money, going in alongside the loan.

2.What moves the figure within that range

Earnings quality: consistent, well-evidenced profit across three years pulls the required deposit toward 20%; thin or volatile earnings push it toward 40% or higher
Sector: lenders treat asset-backed businesses, such as those with property or equipment, more generously than service businesses with little to recover if the loan defaults
Your own experience: a buyer with direct sector experience and a credible operating plan is a lower risk than a career change into an unfamiliar industry
Deal structure: lenders look more favourably on a deal where the seller is also deferring part of the price, since it signals the seller's own confidence in future performance

3.Reducing the cash you need at completion

Seller-deferred consideration, sometimes called vendor finance, is the main lever. It is common in UK SME deals for 10 to 30% of the price to be paid to the seller over 2 to 3 years rather than at completion, which a lender will often count toward your equity contribution rather than requiring it entirely in cash.

A deal priced at £400,000 with a 20% seller deferral and a lender requiring 30% buyer equity could, structured well, need closer to £40,000 of your own cash at completion rather than £120,000. The trade-off is that you are now also making deferred payments to the seller on top of loan repayments, so the combined monthly outgoing needs to work against the business's actual cash flow, not just the headline numbers.

4.What usually does not count as deposit

Most lenders want to see genuinely available funds: savings, released equity from property, or investment from a named equity partner. Money you would need to borrow elsewhere to produce, or funds tied up in an asset you have not yet sold, generally will not satisfy the equity requirement, even if it appears on a personal balance sheet.