Securing Borrowing against Business Value

All businesses have a value. Business value can be determined by things such as turnover, profit, projected growth, historical growth, saleable assets, etc. The non-physical assets within a business are referred to as 'goodwill' when a business is purchased.

So, for example, the business value of a lawn mowing round might be $20,000. That might represent $10,000 worth of physical things like a ute and a mower, and $10,000 worth of non-physical things like the list of satisfied customers that the new owner could service from day one.

This can become quite a complex topic and I'm not going to try and explain all the ins and outs of valuing businesses. The point here about value, though, is that if you can establish a value in the business somehow, then potentially a lender or investor

will recognise that value and be prepared to put money into your business on that basis.