Retiring owners are driving demand for business acquisition funding, research from small and medium-sized enterprise (SME) funding provider Asset Advantage found.
Nearly seven in 10 (69%) commercial finance brokers said retirement or plans to step back were the main reasons for business owners looking to sell.
Just under half (46%) pointed to owners wanting to cash out and realise value.
One in five (20%) brokers said business owners were exiting due to rising costs, including changes to National Insurance contributions (NICs) for employers, wage increases, or other business costs.
Only 9% of brokers raised concerns over employment law changes or other regulations.
Gary Thompson (pictured), sales director at Asset Advantage, said: “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: “In some cases, higher costs may be accelerating exit decisions by older business owners and something we may see increase based on the outcome of the upcoming Budget.
“For others though, 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, 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.”
