If you want to buy a business in Florida, now may be the time to start the process. This article explores why the time is ripe.
Over the past year, we have seen a significant increase in the number of businesses being bought and sold. Mergers and acquisitions from June 2020 to June 2021 in the U.S. reached 16,672, a large increase from the 13,446 in the previous 12-month period.
If so many businesses are being bought and sold, is it a good time to buy a business in Florida? We think the answer is yes. Here’s why.
Why Now Is a Good Time to Buy a Business in Florida
1. Aging population.
As a large portion of Baby Boomers transition to retirement age, many are choosing to sell the businesses they’ve built. This generation is one of the largest—second only to Millennials—so that means a lot of transactions are taking place.
2. Low interest rates.
Right now, interest rates for business loans are relatively low, making it an ideal time to apply and get approved. Getting approved for a loan with a low interest rate will allow you to pay less interest over the life of the loan.
3. Private equity dry powder remains at high levels.
Between January and September 2021, recorded deals reached $1.17 trillion globally, eclipsing the previous record from 2007 of $821 billion in a fraction of the time. Even so, private equity dry powder—a term that means the amount of committed but unallocated capital a firm has on hand—is still high.
4. Changes in the tax law.
Under the new tax plan, the tax rate on capital gains will increase from 20% to almost 40%. This is encouraging the drive to make a deal before January 1, 2022, when the law takes effect.
Understanding the Process
For those who want to buy a business in Florida, it’s critical to understand that making such a large purchase is a process, not something that happens on a whim. It is a process that varies from one situation to the next and requires patience and careful planning. However, most business deals typically follow these steps:
- Search
- Letter of Intent
- Drafting of the Contract
- Conducting Due Diligence
- Closing and Distributing the Funds
What may seem like a simple process at the search and letter of intent stages can become complicated during contract negotiations, so it is critical to enter into a deal well prepared.
Get Solid Advice Before You Buy a Business in Florida
Before you buy a business in Florida, it’s critical to consult with someone who can guide you through the process. Acquiring a business can be a complicated legal process that an experienced attorney can help you navigate to avoid any potential risks. If you have any questions about acquisitions or business law, please do not hesitate to contact the Saltiel Law Group.