My Florida Business Broker

Optimal Window Closing Soon for Business Owners

If you’re thinking about selling your business anytime soon, your best opportunity in at least a decade is quickly fading.

It’s been an interesting 18 months, to say the least. We’ve seen widespread shutdowns and complete collapses of entire industries. However, as business tends to do, we have mostly recovered. The entrepreneur always finds a way. Most small businesses have not only recovered but are thriving. 

In 2020, our federal government was so nervous about small businesses, they boosted existing SBA programs to give buyers an incentive to invest in America. The biggest change was the announcement that the SBA would pay the first 6 months of principal and interest for loans. In addition, they were waiving loan guarantee fees. For most borrowers, this equated to thousands of dollars. The good news is that it worked well. Business sales remained strong. After a few months, the SBA scaled back this program and announced they would now only pay 3 months of principal and interest. That’s still a screaming deal for buyers, but this program is set to expire on September 25th.

What This Means to Sellers of Small Business

It’s still a seller’s market. Every day, I get approached by buyers looking for good businesses. Part of what is driving this phenomenon is a perfect storm of government financial incentives, economic policy, and political pressure. When one or more of these conditions change, it will shrink the buyer pool. This means sellers may take longer to sell, net less money, and be taxed at a higher rate. Our team is following these factors carefully:

Capital gains tax increasing

President Biden expected to propose capital gains tax increase from the existing 20% to an almost double 39.6%. For example, if you sold your business for 1 million dollars, you would pay an additional 194,000 in taxes. This alone might be a good reason to fast forward the sale of your business. 

Interest rates could be going up

In April, the Federal Open Market Committee stated they do not plan on raising interest rates until 2023. While this is good news, inflation rose to 4.2% in April, the fastest increase since 2008. As of now, the Fed is hoping this is a temporary blip, but if higher inflation lingers, there will be increased pressure to raise interest rates. 

This means it will be harder for buyers to get a loan to buy your business. 

Our advice

If you are planning on keeping your business for 5 years or longer, there’s not much you can do other than to ride it out and focus on increasing revenues. However, if you plan to exit your business within 5 years, you should talk to a business broker so they can give your professional guidance and estimate the value of your business today. You may find that you should sell now vs working in the business for another 3 years. Even if you add revenues in the future, it may still not offset the additional taxes and other fees. 

One question that caused confusion in the market earlier this year was how PPP was affecting business values. That issue has largely been settled, at least for businesses that took the first round of PPP. Those loans are being forgiven and banks are dismissing or discounting 2020 performance numbers due to the forced government shutdown. 

About Bianca Evans

Bianca Evans is an experienced business broker based in Jacksonville, Florida. She is a top producer in her field. She has made over 170 transactions since 2006 which makes her among the most seasoned in the area. She is a Certified Business Intermediary (CBI), a Certified M&A Professional (CM & AP), a Board Certified Intermediary (BCI), and has her B.S. degree from the University of Florida.

Other notable accolades and achievements:

•The Million Dollar Plus Award 2008, through 2020

•Dealmaker Award top 3% in the state for completed deals 2018

-Most dollars sold in North Florida in 2018, 2019

•Sold an array of industries including manufacturing, wholesale/distribution, service, retail, restaurants, professional offices, and more.

•25 years of Sales Experience

She maintains her professional networks by participating in a variety of associations including the International Business Brokers Association (IBBA) and the Business Brokers of Florida (BBF).

One interesting fact about Bianca is that she used to be a business owner herself! She has been on both sides of the transaction when she purchased and later sold that same business. She finds that perspective invaluable when relating to her clients and balancing the many details and emotions.

She is licensed in Georgia and Florida and speaks fluent German.

To reach Bianca, email: [email protected] or visit her website https://www.myfloridabusinessbroker.com/

If you’re thinking about selling your business anytime soon, your best opportunity in at least a decade is quickly fading

It’s been an interesting 18 months, to say the least. We’ve seen widespread shutdowns and complete collapses of entire industries. However, as business tends to do, we have mostly recovered. The entrepreneur always finds a way. Most small businesses have not only recovered but are thriving. 

In 2020, our federal government was so nervous about small businesses, they boosted existing SBA programs to give buyers an incentive to invest in America. The biggest change was the announcement that the SBA would pay the first 6 months of principal and interest for loans. In addition, they were waiving loan guarantee fees. For most borrowers, this equated to thousands of dollars. The good news is that it worked well. Business sales remained strong. After a few months, the SBA scaled back this program and announced they would now only pay 3 months of principal and interest. That’s still a screaming deal for buyers, but this program is set to expire on September 25th.

What This Means to Sellers of Small Business

It’s still a seller’s market. Every day, I get approached by buyers looking for good businesses. Part of what is driving this phenomenon is a perfect storm of government financial incentives, economic policy, and political pressure. When one or more of these conditions change, it will shrink the buyer pool. This means sellers may take longer to sell, net less money, and be taxed at a higher rate. Our team is following these factors carefully:

Capital gains tax increasing

President Biden expected to propose capital gains tax increase from the existing 20% to an almost double 39.6%. For example, if you sold your business for 1 million dollars, you would pay an additional 194,000 in taxes. This alone might be a good reason to fast forward the sale of your business. 

Interest rates could be going up

In April, the Federal Open Market Committee stated they do not plan on raising interest rates until 2023. While this is good news, inflation rose to 4.2% in April, the fastest increase since 2008. As of now, the Fed is hoping this is a temporary blip, but if higher inflation lingers, there will be increased pressure to raise interest rates. 

This means it will be harder for buyers to get a loan to buy your business. 

Our advice

If you are planning on keeping your business for 5 years or longer, there’s not much you can do other than to ride it out and focus on increasing revenues. However, if you plan to exit your business within 5 years, you should talk to a business broker so they can give your professional guidance and estimate the value of your business today. You may find that you should sell now vs working in the business for another 3 years. Even if you add revenues in the future, it may still not offset the additional taxes and other fees. 

One question that caused confusion in the market earlier this year was how PPP was affecting business values. That issue has largely been settled, at least for businesses that took the first round of PPP. Those loans are being forgiven and banks are dismissing or discounting 2020 performance numbers due to the forced government shutdown. 

About Bianca Evans

Bianca Evans is an experienced business broker based in Jacksonville, Florida. She is a top producer in her field. She has made over 170 transactions since 2006 which makes her among the most seasoned in the area. She is a Certified Business Intermediary (CBI), a Certified M&A Professional (CM & AP), a Board Certified Intermediary (BCI), and has her B.S. degree from the University of Florida.

Other notable accolades and achievements:

•The Million Dollar Plus Award 2008, through 2020

•Dealmaker Award top 3% in the state for completed deals 2018

-Most dollars sold in North Florida in 2018, 2019

•Sold an array of industries including manufacturing, wholesale/distribution, service, retail, restaurants, professional offices, and more.

•25 years of Sales Experience

She maintains her professional networks by participating in a variety of associations including the International Business Brokers Association (IBBA) and the Business Brokers of Florida (BBF).

One interesting fact about Bianca is that she used to be a business owner herself! She has been on both sides of the transaction when she purchased and later sold that same business. She finds that perspective invaluable when relating to her clients and balancing the many details and emotions.

She is licensed in Georgia and Florida and speaks fluent German.

To reach Bianca, email: [email protected] or visit her website https://www.myfloridabusinessbroker.com/