Current State Of Business Sales In Florida

Naturally, we are getting a lot of questions these days from both buyers and sellers about the current state of business sales in Florida, and there are a lot of misconceptions flying around too, so we wanted to set the record straight by sharing what’s been happening at Green & Co. in recent months. 


Buyers Are Still Shopping

We closely track all of the buyer inquires that come into our office for our listed businesses. From February to May of this year, we have seen a 42% overall increase in the number of inquiries we’ve received. The quantity of buyer inquiries has been steadily increasing month on month, with a rise of 5.8% from February to March, a surge of 22% from March to April, and an increase of 10.4% from April to May. Historically, our numbers stay pretty steady month-to-month, while we maintain a similar number of listings. 

At first, we thought that this surge in inquires might be due to people being stuck at home with nothing better to do than to look around at businesses for sale. What we have found, after speaking to these potential buyers, is that the reality is quite the opposite. We are seeing a higher quality of buyers coming through; buyers who are more serious and not “tire-kickers.” Overall, we get the impression that people are re-thinking their current employment situations and looking for change, they are desiring to relocate to Florida, or they are wanting to invest the money they have in a business rather than the stock market or real estate. It’s normal for us to spend lots of time sifting through lots of “lookie-loo” buyers before we find the quality ones, so it’s been quite refreshing to work with potential buyers who are more serious about purchasing a business. 

 

Buyers Are Making Offers

Because we have more buyer inquires, and serious ones at that, it’s no surprise that we have been busy writing up and presenting offers. I think this week alone we are working on more offers at one time than we’ve had all year put together. So, it’s safe to say that buyers aren’t waiting to pull the trigger on their purchase, and that they are wanting to move forward and get themselves into these businesses, which is awesome news for our sellers. 

 

SBA-Backed Loans Are Still Possible

With federal programs, like the SBA (Small Business Administration), constantly fluctuating and changing with our current challenging economic situation, there have been a lot of unknowns when it comes to SBA-backed loans over the past few months. Of course, we are staying in close communication with the lenders that we work with frequently and they are doing a great job of keeping us updated. As of now, they are still lending on the SBA 7a loan program, which funds new business acquisitions. However, they are not lending on businesses that are currently closed or have declined in sales revenue. So, in order to get an SBA-backed loan to purchase a business, the business has to be healthy. As an added bonus for buyers, the SBA will pay the payments for the first 6 months on new loans for buyers who close on a business purchase before September 27, 2020. 

 

Business Deals Are Still Closing

We’ve had a handful of closings delayed due to our current conditions. Many of those deals involve an E2 Visa buyer. In these cases, there is a contingency in the purchase contract that the buyer needs to be approved for their E2 Visa before the sale can conclude. The granting of visas by the U.S. consulates around the world stopped as soon as the pandemic broke out across the globe, so they are still on hold. Hopefully, as soon as the individual countries open back up again, those visas will be processed and those closings will be able to get back on track. 

However, we have been having closings in April and May, and surprisingly enough, some of them are businesses that you wouldn’t expect to close during a pandemic. One of them was a breakfast restaurant that had closed its doors and the staff had been let go. From the time the seller signed the listing agreement to the time he signed the closing paperwork was seven weeks, which is a company record for our fastest sale yet. Another business deal that has closed recently was a networking franchise, which obviously networking groups aren’t allowed to gather together in person at the moment, so it was quite a brave move on the part of the buyer to take the leap now. But our hat is off to him, as all entrepreneurs need courage to achieve success. 

 

Low Inventory Of Businesses For Sale

With all of this buyer interest and activity, we are honestly in need of more businesses to sell. There is definitely not enough inventory currently on the market, and we have lots of buyers just waiting for the perfect business to become available. Because we have very eager buyers for businesses in certain industries, several of the brokers on our team have been calling around to businesses in those industries to see if the they are interested in selling. From speaking to business owners recently, we get the impression that some business owners who are thinking about selling or who want to sell are holding out to see what happens after we all get back on our feet post-COVID 19. So, we think that because of that mentality, we are seeing less new business listings coming on the market right now. However, the demand is there, so we need to get some supply. For business owners who are thinking of selling, from everything that we have seen in the past few months, I’m going to go out on that limb and say that now is a good time to list your business. If you are a seller who would like to have that conversation and explore your options for exiting your business, we’d be happy to have a chat with you about that.

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