An overwhelming majority of business brokers report that the sales cycle is taking longer than before the financial crash, according to a forthcoming BFS survey.
Ninety-seven percent of brokers we surveyed earlier in the year said the sales process was more protracted following the credit crunch, with 43% saying it was "taking significantly longer" to sell a business. In 2008, 17% of business brokers said it took less than four months to sell a business, compared to 2% today.
The most obvious reason for this is that credit is scarcer. However, the survey also indicated that business buyers were detecting signs that the credit drought was easing, with roughly the same amount of buyers finding it easy to obtain credit as those finding it difficult, 28 and 26% respectively.
It's more likely that buyers and sellers are simply further apart in their valuations and it's taking longer for them to negotiate a compromise. Perhaps buyers are just more careful and are taking longer conducting due diligence.
The survey - full results of which will be published in the next few weeks - certainly indicated this was the case and also showed a rise in the number of deals collapsing, no doubt thanks to this disparity in pricing expectations.
However, there was also evidence the situation was now improving. Further clarification will emerge shortly on this story as we collate the survey data...
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