Carl Taylor Senior Consultant

Buying Out Your Business Partner: Buyout Calculator 

When it comes to buying out a business partner, one of the biggest challenges you may face is how to finance the transaction. Whether you're acquiring your partner's stake in the company due to retirement, a change in business goals, or a desire to move on to new ventures, the value of a payout for an existing shareholder can be significant, and as a result, the tax implications of funding it can be very significant. 

In this article, we'll explore some of the most common financing options for buying out a business partner, you can also download our calculator tool which enables you to discover which tax and other considerations you need to think about to achieve the best result.

Financing options

Personal SavingsThe most straightforward financing option for a business partner buyout is to use your own personal funds. This may include tapping into your savings account, using a personal line of credit, or even taking out a home equity loan. 

Borrowing from friends and familyIf you have friends or family members who are willing to lend you the funds you need, this could be an option. 

Selling assetsIf you have assets that you can sell, such as real estate, this can be an option for raising the funds you need.

Other financing optionsThere are a variety of financing options available for business buyouts, including loans from banks or other financial institutions. However, these options may come with higher interest rates and other fees – all adding to the ongoing costs and financial burden of a buyout scenario.

Using company funds to buy out a shareholder through a holding company buyout If your company has a healthy cash flow and is generating profits, there is a way to use these company funds to finance the buyout.  Using company money is often the only way that the remaining shareholder(s) can afford to buy the leaver’s shares.

Shareholder buyout calculator

Download our calculator which enables you to input your values and shows you an estimate of potential tax and/or interest cost involved in going down all of the above routes, allowing you to see the most tax-efficient options.
Download your Shareholder Buyout Calculator
Tax affairs are complicated and we would always advise you to speak with your advisers before making any changes.  For more information on how we can help you and your business please contact us at or call 02476673160.

Please note: This article is provided for information only and was correct as at time of writing (21/07/23). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance.  No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.