Charlotte, N.C., Aug. 28, 2014 (GLOBE NEWSWIRE) -- Small business sales will remain in a slump until bank lending becomes less restrictive and confidence in the economy grows, according to business owners and aspiring entrepreneurs who responded to a recent BusinessesForSale.com survey.
BusinessesForSale.com is an online marketplace for buying and selling small businesses. In July and August it surveyed its database of people who have listed, sold, bought or inquired about businesses for sale, as well as business brokers.
More than 70 percent of the 1,053 survey respondents expressed optimism about the economy, but not without reservation.
In addition to having difficulty accessing capital from traditional lenders, other concerns include costs associated with the Affordable Care Act, small business taxes and current or projected minimum wage increases.
Survey respondents who purchased a business this year indicated the primary reason for buying was because the right situation happened to present itself.
"While our business listings have been steadily growing over the past few months, the lending environment and economy are clearly making potential buyers hesitant to take the plunge," said BusinessesForSale.com Executive Consultant Nick Pili.
The overwhelming majority of businesses purchased were restaurants and retail businesses.
This aligns with a recent New York Times report about a study from The National Employment Law Project, which "...found especially strong growth in restaurants and food services, administrative and waste services and retail trades. Those industries, which often pay wages at the federal minimum, accounted for about 40 percent of the increase in private sector employment over the past four years."
About 55 percent of brokers surveyed by BusinessesForSale.com said they believe fewer people are considering buying small businesses this year, citing the inability to qualify for traditional loans as the primary reason.
Business owners are most often selling because they want to retire, according to the broker respondents. Average sale prices have been between $100,000 and $250,000 in 2014, with first- and second-quarter average sale prices remaining about the same, according to the survey.
Brokers also stated that the majority of their sales this year (44 percent) have been in the southern part of the country, and nearly 50 percent of buyers are in Generation X (born 1965-1980) followed by Baby Boomers (born 1946-1964.)
Pili said that comments on the survey indicated that Baby Boomers are buying businesses because they can't find jobs, while Generation X buyers expressed more optimism and more have the financial means to invest in a business without borrowing.
BusinessesForSale.com is a global online marketplace for buying and selling small businesses, with nearly 60,000 business listings and 300,000 registered buyers. The company's U.S. helm is in Charlotte, N.C.