- February 13, 2023
- Posted by: Waldon Fenster
- Categories: Acquisitions, Tips, Trend
The Perfect Time to Prepare Your Business for Sale: Industry Debt Trends & Equity Evaluations
In today’s market, there are a number of factors that can influence the overall value of your business. It is important to understand industry debt trends and equity evaluations when preparing your business for sale. Understanding these factors can help you make informed decisions about how best to position your company for maximum sale value.
In this article, we will analyze current industry trends and discuss why now may be the perfect time to consider using options such as ERC, EaaS, and Sales Leaseback to infuse cash into your business and boost evaluation.
Analyzing Industry Debt Trends
One of the most important factors in determining a company’s sale value is understanding its debt trends. Following the economic downturn in 2008, many industries experienced decreased borrowing capacity due to increased levels of risk aversion among lenders. As a result, it became more difficult for businesses in certain sectors (e.g., manufacturing, food, healthcare and energy) to obtain lines of credit or working capital loans necessary for their operations.
Fortunately, in recent years debt trends have been trending back up across all industries. Many lenders are once again willing to take on additional risks associated with lending money to businesses operating within high-risk sectors such as manufacturing and healthcare.
This means that businesses in these industries have an easier time obtaining financing in order to grow their operations or prepare them for sale.
Examining Equity Evaluations
Another factor that influences a company’s sale value is its equity evaluations. When evaluating any potential purchase offer, both buyers and sellers must consider how much equity each party has in the transaction.
Generally speaking, buyers want companies with higher levels of equity so they can protect themselves from any losses if the investment does not pay off as expected or fails entirely down the line. For this reason, it is important for sellers to ensure that their companies’ equity evaluations are accurate prior to entering negotiations with potential buyers.
Unlike debt trends which have generally been trending up across all industries over recent years, equity evaluations vary from sector-to-sector and depend heavily on macroeconomic conditions at any given time in history (e.g., during times of growth it is typically easier to obtain higher levels of equity).
As we enter 2021 however, many analysts are predicting strong growth prospects across all major industries thanks largely to the passage of multiple stimulus packages by the US government over recent months (e.g., CARES Act). This means that now may be an opportune time for owners who are considering selling their businesses soonest as it could potentially result in higher sale values due to boosted market confidence and better overall financial health throughout the economy as a whole.
Infusing Cash into Your Business through ERC & EaaS
Utilizing tax credits such as Employee Retention Credit (ERC) and Expanded Accessibility Account Service (EaaS) could provide owners with greater financial resources when preparing their businesses for sale by allowing them access additional funding sources that might otherwise not be available through traditional loan methods or other investments (e.g., venture capital).Additionally, engaging a Sales Leaseback firm could also help infuse cash into a business while simultaneously boosting its overall evaluation by providing investors with an alternative form of collateral should they opt against purchasing a company outright..
In conclusion, understanding current industry debt trends along with examining your company’s equity evaluations can help you make informed decisions about whether now is the perfect time for you to prepare your business for sale or hold off until later on down the road when macroeconomic conditions may be more favorable towards achieving maximum return on investment from potential buyers down the line.
With this knowledge , utilizing tax credits such as Employee Retention Credit(ERC) , Equipment as a Services(EaaS ) or Expanded Accessibility Account Service (EaaS), or engaging Sales Leaseback firms could also help infuse cash into your business before putting it up for sale — ultimately resulting in greater returns upon completion of transaction.
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