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For Sellers
While the
likely increase in the capital gains rate is not a reason to
sell your business, if you have been thinking about selling it
could be a motivating factor to sell now.
Many
business owners think that due to the poor economy they will not
receive a fair price for their business. The poor economy can
make buyers cautious; however, low interest rates can make
buying a business right now very attractive.
Buyers (and
their financing source) look at how well their loan payments are
covered by the cash flow of the business being acquired.
For the
same principal borrowed, loan payments today are about 15% lower
than 3 years ago due to lower interest rates. So buyers can and
will pay more right now for businesses doing well, than what
they may have offered 3 years ago.
Businesses
that are seeing a drop in their cash flow may still achieve a
value close to the level of several years ago simply because of
the lower financing costs that the buyer can obtain.
We are in
contact with many companies and individuals who are highly
qualified and interested in making an acquisition.
Ready to
Sell Your Company?
Founded in
1981, Keate Partners is one of the oldest and largest business
brokers / merger & acquisition firms in the Tri-State area. With
our total now exceeding 750 transactions, we have sold more
Tri-State businesses than any other local or national firm!
Visit "For
Sellers" to learn more about our services, and the
steps in finding and selling your business. On this page we
have prepared a short video that describes the three stages of
preparing and selling a business.
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For Buyers
As part of
the stimulus bill passed this year by Congress, the SBA is
waiving its upfront fees for guaranteeing acquisition loans.
As a buyer,
this can save you about two points on your loan ($2,000 upfront
fee for every $100,000 of loan).
With the
prime rate currently at 3.25% (one of the lowest levels in
decades), business acquisition loans in the area of 5.25% to 6%
are available with 10 year amortization.
While it
makes sense to be cautious on what business you buy right now
due to the uncertain economy, if you can find the right business
the cost of financing the purchase is at an historical low.
Obviously a
business purchased now that is producing cash flow to support
your acquisition financing costs, will likely turn out to have
been a great buy as the economy begins to improve.
At Keate
Partners we have not had any difficulty in obtaining financing
for buyers.
How much
can you finance? A general rule of thumb is you need a cash
investment of 15% to 20% of the purchase price; the remaining
80-85% can be financed.
Interested in Buying a Business?
Whether you
are looking to purchase your first business, or you're a company
searching for acquisitions to enhance your current operations,
you will find that the detailed information prepared on our
client companies (provided after confidentiality requirements
are in place) will allow for quick analysis to determine
interest.
Visit "For
Buyers" for additional details on the process of
buying a business and "List
of Businesses for Sale" for generic profiles of
companies presently available. |
