In the coming months, be on the lookout for an increase in seller-financed mergers and acquisitions activity. 

For the last several years, the small and midsized business segment was experiencing increasing purchase price multiples fueled by low interest rates and the available credit made possible by banks’ confidence in a robust economy. Owners of solid businesses – motivated by a desire to close deals before anticipated possible changes in the current tax code – staged auctions and entertained multiple competing all-cash offers. Buyers took advantage of easy credit and low rates to deploy a combination of debt and equity, with debt on the portion of a deal supported by commercial real estate often exceeding 70%.