Small business acquisitions grew 10% over the previous year and 3% over the previous quarter, according to BizBuySell’s Insight Data, which tracks and analyzes U.S. business-for-sale transactions and sentiment from business owners, buyers, and brokers. A total of 2,384 businesses changed hands in the first quarter, representing an enterprise value of $1.8 billion, which is 24% higher than the same time last year.
After a relatively flat 2023, bogged down by rate hikes and the economy teetering between recession and a soft landing, deals appear to be moving forward again. In fact, U.S. banks anticipate an increase in demand for loans in 2024, according to a recent Federal Reserve survey. That said, with inflation still above the Federal Reserve’s 2% target, comments by Fed Chair Jerome Powell indicate rate cuts are not likely to happen anytime soon.
However, transactions are still 5% below 2019 pre-pandemic levels. Dealmaking is becoming more prudent as buyers and sellers carefully consider price and terms to better align with the market. Today 27% of sellers are open to including some portion of seller financing, compared to 22% a year ago. This is good news for buyers, where 85% say they consider it important.
Source: BizBuySell Market Insight Report, https://www.bizbuysell.com/insight-report/