Latest News from Everett Masson & Furby
More than green shoots, opportunity returns!
In our twenty four hour news media the persistent reminder of “doom and gloom” can make many business owners jittery and disproportionately pessimistic. Clearly we are experiencing some transfer of the credit crunch impact on banking to the business economy and inevitably the media seize upon this information since it makes a good story. At EM&F Group, we assess the impact of the financial situation in what we consider to be a much calmer and measured way in that “good businesses with good accounts selling to creditworthy buyers” are definitely achieving good levels of lending from our lenders. At this point in time we have only seen a slight decline in the number of business owners planning to sell their businesses. In fact, we currently have almost as many vendors this year as we had in the same period last year. Crucially, this has also been matched by good levels of serious buyers looking for alternative ways of making a living given the current difficulties in the job market.
At the time of writing EM&F Group have a large number of vendors at the accepted offer stage who are now entering the final phase towards completing the sale process. All in all, our experience is that the smaller and medium sized business sale marketplace is far more positive than many would paint it. Sometimes purchasers have difficulty in financing a purchase, so we have set in place several excellent commercial lending brokers who may be able to assist a purchaser. As the finance markets recover after a tumultuous few years, it is good to see lenders lending and clients actively seeking finance to fund growth and enhance their businesses. We are also seeing clients purchase businesses of all shapes and sizes.
The Enterprise Finance Guaranteed Scheme has also been a considerable help in achieving finance, with the Government securing 75% of the clients borrowing, allowing clients with a lack of security to borrow, especially when looking to acquire the assets and goodwill of businesses. The Enterprise Finance Guarantee Scheme doesn't replace the need for a deposit from the client but it does help clients who previously would have used equity in their homes or investment property to secure a deal, as this equity in a lot of cases has been eroded or worse wiped out by the recent property price crash.
With lenders returning to the market and people wanting to get on with life after a period of stagnation funding is available in the UK. In order to secure funding good house keeping is paramount with accounts needing to be up to date and filed on time, management information when requested, bank statements kept in good order with no unpaid items and clients living within their means all key to obtaining commercial funding. So with the right preparation, the correct approach and attitude the commercial funding market is alive and well in the UK today. So for any owner who is contemplating selling their business, it may be appropriate to think of selling sooner, rather than later, as it is clear the green shoots are emerging!