One of the biggest myths about buying a practice is that you need the full purchase price in cash. You usually don't. Here are the main ways to finance an accounting practice acquisition in South Africa.
Bank and commercial finance
Banks will lend against an acquisition where the fee base is stable and the numbers stack up. Because recurring fees are predictable, a well-run practice with diversified clients is a fundable asset. Expect to show a business plan, the practice's financials and your own track record.
Vendor (seller) finance
Often the smoothest route: the seller is paid part of the price over time, out of the fees the practice continues to earn. This aligns everyone's interests — the seller is motivated to hand over well, and you fund much of the purchase from the income it generates. Vendor finance frequently sits alongside a retention clause.
Transaction financing through the marketplace
AFS can help arrange transaction financing as an add-on service, so funding isn't the thing that stalls an otherwise good deal.
How lenders and sellers assess the deal
Whichever route you take, the same factors matter: fee stability, client concentration, staff retention, and how dependent the practice is on the outgoing owner. The stronger these are, the easier the deal is to fund.
A note on structuring
How you fund the purchase interacts with how the deal is structured and taxed. Get your accountant and a finance professional involved early — it affects your cash flow for years.
Line up funding before you bid
Having finance ready makes you a credible buyer and speeds everything up.
