Acquisitions of small and medium-sized enterprises flattened out in 2023 due to rising interest rates, but are expected to improve in 2024

NEW YORK (AP) — Is it a good time to sell a small business, or maybe buy one?

The acquisition rate of small and medium-sized enterprises has fluctuated in 2023, reflecting the rise in interest rates that has put a damper on the market.

But a strong fourth quarter could bode well for 2024, helped by signals from the Federal Reserve that rate hikes are complete.

Overall, the number of small business acquisitions remained largely unchanged in 2023, according to Insight Data from business marketplace BizBuySell, which tracks and analyzes U.S. business transactions.

A total of 9,093 companies were reported sold on BizBuySell in 2023, an increase of less than 1% compared to 9,054 companies sold in 2022. Transaction value increased from $6.3 billion to $6.5 billion. Quarterly results show clear changes in the market. Volumes fell 10% in the first quarter, remained flat in the second and third quarters as the pace of rate hikes slowed, and rose 12% in the fourth amid news of slowing inflation and possible rate cuts. increased. .

So, as long as business appears to be strong, now could be a good time to buy.

“If a company has a good return on investment and the ability to service its debt, it could be a good time to buy, regardless of interest rates,” said Ken Bohenek, a business broker with Murphy Business Sales in northern Idaho. “It’s expensive.” , you may be in a much better cash flow situation than someone who bought when money was cheap and interest rates rose quickly. ”