Glossary
Going concern
A business sold as a live, operating whole, trading, staffed, stocked, rather than as a collection of assets. Most business purchases are structured this way.
In plain English
Buying a business as a going concern means buying the operation itself, running: the trade, the staff, the stock, the lease, the customer relationships, handed over intact on settlement day. It is different from buying the assets out of a business that has stopped, where you get equipment but not momentum.
In Australia the sale of a going concern can be GST-free where the contract meets specific conditions, which is one of several reasons the term appears in sale contracts and one of many questions that belongs with your accountant and solicitor, not with us.
Why a lender cares
Lenders treat a going concern purchase as buying an income stream, so the evidence that matters is the trading history: can the earnings that justify the price be traced to lodgements and bank deposits? A going concern with decades of consistent trading is a fundamentally different credit risk from a fresh start, and files should be built to show it.
Where this term takes you
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