Year-over-year trends show a slight downtick in cash at close in most sectors with corresponding increases in seller financing and/or earnouts.
“We expected to see an increase in earnouts due to COVID-19. With potential new shutdowns ahead and ongoing economic uncertainty, earnouts represent a way for buyers to reduce risk,” said Lisa Riley, Principal, Delta Business Advisors. “Frankly, I think we expected a bigger jump in seller financing, particularly since earnouts are not an option for deals that use SBA funding.”
According to the IBBA and M&A Source 2020 Q2 Market Pulse https://deltabusinessadvisors.com/market-pulse-2020-q2/
Learn more about Delta Business Advisors at: https://deltabusinessadvisors.com or contact us @ 480-686-8062 | Lisa@DeltaBusinessAdvisors.com | Schedule a meeting with Lisa: https://calendly.com/lisariley
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