It is tough to answer a general question like this when the specifics differ in each case. You plan on buying the business .... how? If your purchase will not affect the balance sheet of the company, that is a good thing. If it utilizes corporate assets to buy out your father, not a good thing. You say it lost money last year, and has little cash.... how were previous years? In other words, is there any net worth to be had? Why the loss? Perhaps it would be better for you to join him in thed business in order to get the experience, and help him turn around the finanicals.
I know the guys on this forum aren't going to like this answer, but you really need to find a member of NASBP in your area and sit down and talk to him about your circumstances.