THE BUYER'S BRIEF - MARKET PULSE
The most persistent myth in business acquisition just got debunked by the brokers themselves.
BizBuySell just released their latest Insight Report. Three numbers jumped off the page. 71 percent of brokers say recent Fed rate cuts have had no noticeable impact on buyer behavior. Another 71 percent say the cuts are not bringing more buyers back to the market. And a third 71 percent say buyers are not delaying transactions because of rates. Same number, three ways, same answer. Rates are not driving deal flow.
Max Friar at Calder Capital put it bluntly. "This is a myth that buyers sit around and wait for rate drops. Buyers buy."
Here's why this matters for you this week.
If you have been telling yourself that you will get serious about your acquisition search when rates come down another point, you are competing for deal flow against people who stopped waiting. The serious buyers are already in the market. They are writing letters, building broker relationships, running deals through DealScore Pro, and submitting offers. By the time rates move to wherever you think they need to be, those buyers will have first pick of the listings that actually matter.
There is a second reason to stop waiting. A one-point drop in the SBA rate changes your monthly payment on a million-dollar loan by roughly $620. On an SDE of $250K, that is about half a percent of cash flow. It is real money, but it is not a deal-maker or a deal-breaker. Deals that work at 10.5 percent work at 9.5 percent, and deals that fail at 9.5 percent fail at 10.5 percent. The math does not hinge on the rate. The math hinges on the business.
So what does move deals right now? The same thing that has always moved them. Buyer readiness. 80 percent of brokers forecast higher deal volume over the next six months compared to last year. Median sale price is up 2 percent to $350K. Median cash flow is up 3 percent to $159K. The owners are still coming to market, the buyers are still closing, and the serious money has priced rates in already.
Smart buyers don't watch the Fed. They watch the deals. They stress-test every listing at the current rate, make the offer that makes sense, and structure seller notes to protect themselves against whatever the rate environment does next. If rates drop later, great. The monthly payment falls. Cash flow improves. That's a bonus, not a plan.
The buyers who wait always lose to the buyers who don't. This is always true. This year it happens to be true with data to back it up.
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