A total of 692 small and mid-sized businesses have sold in California so far this month. The companies that changed hands included a full range of industries, such as food service, auto related, retail, distribution and manufacturing.
While the pace of closed escrows early in the month was on track to match or exceed the sales figures for last February, when 1,002 business sales were recorded, the activity slowed the past few days. This is often what happens directly prior to a three- day weekend when buyers, sellers and business intermediaries take time off.
Business transactions in some large California counties are closing at a higher rate this month than during the same period last year. A total of 47 sales of small businesses have been recorded in Alameda County since February 1, compared to 46 completed deals in all of February last year. The count of 20 Sacramento County businesses changing hands to date this month also exceeds, by one sale, the total registered during all of last February. And as of last Friday, the number of deals closed in Riverside County this month reached 35, well ahead of the 20 sales total in the county for February 2010.
A key indicator of business sales activity expected in the months ahead is the volume of SBA loan pre-qualifications, along with the availability of money needed to help fund transactions. A positive sign is the SBA report showing an increase in lending activity in California this fiscal year (2011, which began last October 1.) The agency's recently released figures for California show a total of 3,106 approvals of 7(a) and 504 loan program requests this fiscal year, through February 11, with a total value of $1.99 billion. That compares favorably to approval rates for all months of the 2010 Fiscal Year, when SBA loan program approvals in California totaled 6,326, with a value of $2.8 billion.
Also encouraging is that SBA preferred lenders report an increase in the number of buyers, and even sellers lining up to get preliminary approval for some of the funds needed to complete their deals in coming months. It's likely that lenders will continue receiving more applications for the SBA 7(a) and 504 loan programs well into 2011. The extent to which lenders are willing to participate in the market, however, will be dictated by the strength of the economic recovery.
But negative news comes from Washington DC, as the Federal Government prepares to cut back on the funds made available to the SBA to support its lending, training and other programs. The 2012 Federal budget has yet to be voted on in Congress, and after approval won't take effect until October. But it's clear that one consequence of the reduced budget next fiscal year will be the end of the incentive programs the agency instituted to help improve lending activity over the past two years. California's small business advocates, entrepreneurs, business brokers and agents are hoping measures taken at the Federal level to spur the economy will have the desired effect, and that lenders will be more willing to make money available for small business purchases.
About The Author: Peter Siegel, MBA is the Founder of www.BizBen.com (established 1994 - 7000+ California businesses for sale, 200 new listings daily) and the Director of the BizBen Network (16,000 business buyers, 4,000 small business owners, 1,800 California business brokers & agents). He consults daily with business buyers, business owners, small business advisors, business brokers and agents on selling and buying California small businesses. He is also the author of three books on the topic of how to buy and sell California small to mid-sized companies. For a FREE consultation on the best way to buy or sell a California business, phone Peter Siegel direct at 866-270-6278.
Categories: Business For Sale Statistics
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services
Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.
|Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area
Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.
|Helen Yoo: Escrow & Bulk Sale Services - Southern California
New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|Diane Boudreau-Tschetter: Escrow And Bulk Sale Services
California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
|Brad Steinberg, Broker - Laundromat Specialists
PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.
|Elizabeth McGovern: Escrow Services - SF Bay Area
McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.
|Joe Sandbank, Esq. - Legal Services
I have provided legal counsel to business buyers, sellers and brokers for over 17 years. With prior experience as a business broker and SBA loan officer, Joe brings both a practical and legal approach to all aspects of the business acquisition process.
|Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses
Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.
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