Owning a business means you are naturally exposed to fluctuations. The highs and lows have always been a constant – where one sector is doing well often another is not.
However, over the past five years the ebb and flow of those changes have been far more regular and significant, with shifts in government leadership, the impact of Brexit, the pandemic and the outbreak of war in Ukraine.
This has clearly taken its toll on a lot of businesses, but many owners have stood firm, adapted and found a way to not only survive but even thrive.
Be it a desire to future proof their business or just opportunistic – the increased number of acquisition and management buy out enquiries we have received at Bathgate suggests there is a real interest in both buying and selling.
When clients come to us to explore funding options for a management buy-out or acquisition, many of our meetings start with them saying: “You must think I am crazy for buying a business right now.”
However, we don’t. And here’s why.
First of all, if you’ve made it through this unprecedented and unstable period, you have a solid and robust business. You may never actually be in a better position to be taking on another.
Secondly, when looking at a business to buy, its strengths and weaknesses have never been more visible. The last few years have exposed companies to a lot of stresses that many won’t have been planned for, so a simple look at the accounts and debtor book will tell a lot of stories, so you know exactly what you are buying.
There is also belief that it is a bad time to raise funding, in fact we find quite the opposite:
- There is money out there– and the banks want to lend.
- Interest rates are still low– although signs of borrowing in the commercial world are starting to creep up, we tend to forget that we have had a record period of low interest rates, but if you look back to pre-2008, it is still cheap money.
- There are a huge variety of funding options– never have there been so many different types of funding out there, with new lenders and products popping up every week with a number of government backed funds still available.
The focus when buying a business right now is not the current climate, but knowing and understanding all of the options available and knowing how to open the doors to get the right mix of funding lines together to get the job done.
Regardless of the size or profit of your new or existing business, expert support is vital to ensure you find the right solution and get the right mix of funding.
If you’d like to discuss your options for buying a business, contact Ben Humphreys at Bathgate Business Finance on Ben@bathgatebf.co.uk or 07436 123856