Lack of appetite from lenders for business acquisitions is still holding back commercial brokers, research from Asset Advantage found.
A third of brokers (33%) said they struggled to get appetite from lenders for business acquisitions, the same as last year.
The number of brokers finding it hard to secure 100% funding has more than doubled from 20% to over 40% compared to last year.
42% of brokers said lenders were not equipped to support smaller acquisitions, with limited funding options.
Gary Thompson, sales director at Asset Advantage, said: “Despite sizeable demand in the market for acquisitions, management buy-outs and buy-ins, our research shows that for a second year running, commercial brokers remain held back by funder appetite, options and loan values.
“Beyond finding a suitable funder, we are seeing real challenges, particularly around smaller acquisitions and tighter requirements of some lenders that prevent them from coming to the table.
“In today’s challenging business landscape, acquisitions and MBOs offer SMEs a valuable way to ensure quick scalable growth and continuity as business owners weigh up their options and management teams plan for the future.”
Thompson added: “For the ongoing health and prosperity of our SME businesses, it’s absolutely critical that these funding lines are available and most of all, accessible.
“From our perspective, business acquisitions remain a real growth area, working with brokers to really understand deals both large and small, the bigger picture around them and provide the necessary funding to cover the entire purchase.
“Rather than rigid processes, it takes a flexible, pragmatic approach which not all lenders are able to offer.”
