Although I talk a lot about buying businesses using investor financing -- as opposed to using banks, lenders, relatives or government financing -- there is another way (besides investors) I sometimes recommend. And that way is simply financing the business's assets. Something most people think is only doable with smaller businesses, but is actually doable with larger businesses as well.

In fact, back before I stumbled onto investor financing and we were buying larger businesses, the same size were buying now, we financed those businesses with the assets.

Here's how it works: When youre financing assets -- and this is especially practical with manufacturing businesses, because they have equipment -- you have accounts receivable and you have inventory. A lot of times you can go in on, say, a $10 million deal, and tell the owner you're going to give him $2.5 million down, and have him carry back the financing.

And then, all you do is go out and borrow or lease back your assets. This way, even though you have financing on the rest, on the equipment, you still have 50% of the cash flow left. In fact, a good rule of thumb is 50% or you dont do it.

Bottom line: If you're looking for different ways to finance a business, financing the assets is still a totally legitimate option you can do on your own if you cant find or work with investors.