Financing Availability / Applying for SBA Loans

Financing Availability / Applying for SBA Loans

A recent survey of 260 business brokers across the nation revealed the following:

68.8 percent said that financing availability has not improved since 2011.  That percentage is virtually unchanged from August 2011, when 67.8 percent of surveyed brokers said financing had not improved from 2010.

Respondents were not optimistic for the remainder of 2012 either as 72.9 percent of brokers expect no change in funding availability through the rest of the year.  Another 19 percent believed financing availability will tighten even further.

Buyers are ready to buy and sellers are ready to sell, but without third-party financing help, they are being forced to find new ways to piece together deals.  Of course, sometimes they can’t find a solution and, as a result, some good deals aren’t getting done.

Lending Restrictions Most To Blame

Banks took the most heat from business brokers for the lack of available financing, with 55.0 percent of respondents explaining that conditions aren’t improving because “banks continue to have more stringent lending policies.”  Government actions made little to no difference, cited 40.8 percent of surveyors, and 36.2 percent noted that the loan process has become more difficult since 2011.  In short, most brokers see a very tough financing environment that is discouraging potential buyers and causing them to give up looking for funding.

Seller Financing the Solution

With third-party financing so hard to secure, most business owners have turned to seller financing as a way of enticing prospective buyers.  Nearly 50 percent of brokers surveyed listed seller financing as “essential” in speeding up the business sale process and another 40 percent cited it as “important”.  Only two percent found it unnecessary in today’s market.

In addition, one-third of brokers surveyed indicated that nearly all small business sales included seller financing while a further 35.5 percent of brokers indicated that most (i.e., 60 to 89 percent) of the deals they see include seller financing.

Survey data supported the fact that seller financing has become the norm.  Over 53 percent of brokers noted that more sellers are willing to offer seller financing in 2012 compared to 2011.

MSNBC’s – Applying for SBA Loans

The U.S. Small Business Administration doesn’t actually loan money directly to small companies, but it does back loans given by banks.  This allows the lender to take a little more risk than it might normally do.  To learn more, click here.

TM Business Brokers, however, continue to get deals done!

We have a strong backlog of buyers seeking all types of companies.  Contact your Pittsburgh | Raleigh Business Brokers – TM Business Brokers to learn whether or not you have a sellable business.  Do not make the mistake of relying on an adviser who does not sell companies for a living.  You may be delaying the sale of your business for the wrong reasons.

Now may be your time.  Contact the experienced professionals at TM Business Brokers to confidentially discuss “your” situation today!