ATLANTIC HIGHLANDS, NJ -With the slow thawing of credit markets and a diminished decline in economic activities, we see increased buyer activities. A recent new engagement generated 50 inquiries just within five days. Thus, we seem to see a trend that continues from what we had stated in our earlier email to you.
However, for the time being, the landscape has changed in numerous ways, most importantly as to how acquisitions are being performed.
There is an increased focus on the buyer’s side with respect to cash flow. Establishing a “secured” cash flow in the due diligence has taken the top priority for buyers, not just for banks. Thus, we increasingly help owners to document said cash flow prior to marketing their business.
On the sell side, owners more often start extending financing to a buyer, i.e. “holding paper”. Said financing was very common twenty years back, however, with the proliferation of the aggressive bank lending in the past years, only the most marginal deals had to be financed by the owner. Not anymore – despite the thawing of the credit market, we are nowhere close to the lending degree as we were in recent history. Within this context, we have helped several buyers to reduce the seller financing by obtaining qualified buyer loans,
All in all, we continue to see increased activity and are prepared to help our clients on the buy or sell side.