Selling a Business Gets Even Harder
The median sale price falls 6 percent year over year, as BizBuySell reports that higher interest rates, tougher loan rules, and tariff-driven uncertainty have had a predictable impact.
Good Morning!
Here are today’s highlights:
Ami Kassar walks through what can go wrong when businesses seek capital.
President Trump may be closing in on a 15-percent tariff deal with the E.U.
The Justice Department prepares to bring criminal charges against tariff evaders.
Spring is usually the busiest time for home sales. Not this time.
SELLING THE BUSINESS
It just got harder to sell a small business: “According to BizBuySell, an online marketplace for buying and selling businesses, the number of transactions declined about 4 percent compared to the same period last year. Buyers are concerned about higher interest rates, tougher loan rules, and overall economic stability. With fewer businesses selling, the median sale price also fell by 6 percent on a year-over-year basis to $352,000. Still, BizBuySell says the pool of buyers is still growing as more people look to escape corporate life, viewing small business ownership as a path toward greater autonomy. Nearly half of all buyers last quarter claimed to be ‘corporate refugees,’ up from 36 percent last year. Despite this steady buyer interest, the time it took to sell a business jumped.”
“Businesses stayed on the market for about 12 days longer this past quarter, reflecting heightened caution and more thorough due diligence on the part of buyers. That almost certainly has to do with the Trump administration’s tariff push, which began to take shape on so-called ‘Liberation Day’ on April 2nd.”
“Further complicating matters are the new, tighter lending guidelines from the Small Business Administration that went into effect in June. Obtaining SBA loans, a common way to finance small business acquisitions, has become more difficult. Recent SBA rules require increased documentation, tighter scrutiny of valuations, and a minimum buyer equity contribution of 10 percent (a seller note can now only cover half of this requirement).”
“Certain sectors remain robust. Service-oriented businesses, including healthcare, construction, and home services, continue to attract buyers due to reliable, and, possibly, tariff-resistant earnings. Not all sectors, though, are following the same healthy trend. Manufacturing businesses saw a 28-percent decline in transaction volume and a 7-percent drop in median sale price. That may not bode well for the Trump administration's push to bring manufacturing jobs back to the U.S.” READ MORE
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