We are living in unprecedented times. Who would have predicted just a few short months ago that a virus from overseas would ravish our country (and the world) and result in the shutdown of all “non-essential” parts of our economy? But here we are.
The COVID-19 (aka coronavirus) global pandemic has disrupted everyone’s lives, and we have all been forced to put everything on hold and hunker down for a while until this thing passes. For many businesses, the impact was immediate. Bars, restaurants, casinos, sporting events, trade shows, and anywhere else that large groups of people congregate have been shut down for the foreseeable future (although some restaurants have been able to stay partially open by providing takeout and delivery).
For other businesses, it will be more of a ripple effect that will impact them over time, and business brokers like us and the clients we serve to fall into this category. There is a lot of fear out there, which means buying activity has mostly come to a standstill. The future is uncertain, and no one is entirely sure how long it will be before everything returns to normal. In an environment like this, it is understandable that prospective buyers would be hesitant to move forward with the purchase of a business.
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And Now for the Good News
There is a lot of fear and panic out there at the moment, but there is some good news in all of this as well. The first thing is that this will not last forever. Our country is very resilient, and there is a good possibility that we will rebound from this crisis and emerge stronger than we were before all this started. The recent passage of a $2 trillion stimulus package by Congress should also help matters by putting some much-needed cash in the pockets of most Americans and providing financial relief and easier access to loans for businesses.
Interest rates are currently about as low as they can get, and the Small Business Administration (SBA) has made tens of billions of dollars in additional funds available for those who need financing to purchase a business. The effect of this is that the government will guarantee a larger percentage of an SBA loan, which will make banks and alternative lenders more comfortable approving them with better terms and conditions for the borrower.
Another piece of good news is that not all industries have been negatively affected by the COVID-19 crisis. For example, the services of accountants and CPAs are in greater demand as businesses look for answers on how to deal with this crisis financially. Tax season has also been extended as the filing deadline for 2019 tax returns is now July 15. So, if you have a well-established accounting practice and you have been thinking about selling it, this may be an attractive investment for the right buyers when all of this is over.
What to Do While You Wait Out the Storm
If you have a business that you are looking to sell, it is not likely to happen overnight with the coronavirus pandemic still ongoing. However, this does not mean you cannot start laying the groundwork for a future sale. By doing the preparation work now, you will be ready to capitalize when things start getting back to normal.
The best place to start is to speak with an experienced CPA and accounting firm broker in your area. Business brokers/intermediaries routinely handle business buying and selling transactions. They thoroughly understand the process, and they can work closely with you to help you get the tasks you need to get done to prepare your business for a successful sale.