Business Sales Report Winter 2021

The business sales market has started 2021 with increased demand from buyers amid decreased supply of listings with restaurants and service businesses on the sidelines. Online traffic on business listing websites is higher now than pre-pandemic. Currently we are seeing many buyers who have retired from corporate life or are unemployed after leaving a career in middle management. On the other side, many sellers consist of baby boomers who are ready to retire. The amount of listings is expected to grow in 2021 as the main street market recovers and more sellers enter the market. Businesses that have flourished during the pandemic continue to be in high demand from buyers.

The business sale market received favorable news in the Consolidated Appropriations Act in which a portion of the funds will be used to extend the popular CARES Act Debt Relief SBA 7(a) loan program. In 2020, there was a huge spike in activity in the third quarter during the initial part of the program with the SBA paying six months of principal and interest. This year, the SBA will make the payments to themselves for $9000 a month for six months. In addition, the guaranty fees will now be waived. This fee is typically around 2.5 to 3% and is now zero. Loans must be closed by Sept 30, 2021 and with at least a 90-day cycle to get a loan closed buyers must act fast to secure a business.These new SBA 7a-lending incentives will give way for a more robust business sales market. This amazing opportunity creates value for a buyer to purchase a business. In addition, if you’ve been thinking about selling your business, it creates urgency for buyers to take advantage of this offer, which means more buyers looking into purchasing your business. This new provision is a win-win for buyers and sellers.