Retiring or stepping back from a business are the primary motivations for business owners seeking to sell their companies, according to a new poll of commercial finance brokers. Approximately one in seven respondents to the survey (69 per cent) cited this as the main reason behind owners looking to sell.
The findings come as part of the latest commercial broker survey from UK SME asset finance and business loans provider Asset Advantage. The report highlights the growing wave of ownership transitions at UK companies, with a large proportion of owners across numerous sectors approaching retirement age.
Slightly under half of respondents (46 per cent) said that one of the main reasons was business owners wanting to cash out and realise value the business has generated. One in five, meanwhile, said that owners were looking to exit as a result of rising costs, such as higher employer National Insurance Contributions, wage increases or general business costs.
Nine per cent of brokers cited concerns among business owners over changes to employment law or other potential regulatory changes.
Gary Thompson, Sales Director at Asset Advantage, commented: “While it may be easy to draw conclusions from the current economic or political climate, our data suggests that retirement still remains the primary motive for business owners to sell. As these experienced owners look to depart and hand over the baton, it will reshape the ownership landscape within UK SMEs and drive demand for both specialist advice and flexible funding.”
“To facilitate these deals, funders have to be present and proactive, with an appetite for growth and expansion-based lending and importantly, an open-minded approach.”
Thompson added that while, for some older business owners, exit decisions may be accelerated by higher costs (a trend that he said could become more prominent following next month’s Autumn Budget), for others “it’s less about retirement and more about timing – deciding now is the moment to realise the value they’ve created.”
“Whether it’s driven by business owners or by their existing management teams,” he continued, “our data tells us that there is real demand for business acquisition funding, which is likely to be a consistent theme over the coming years.”
Find out more about the common motivations behind business exits
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