How do people think rising rates will affect prices in Small Business space

by a searcher from Harvard University - Harvard Business School

2 years ago

After yesterday's Fed notes/discussion was wondering if anyone had any thoughts on how rising rates will affect this industry? It has been a LONG time since rates have seriously risen and naturally you would think that if debt became more expensive, multiples would come in, etc... Let me know if that is on point or to what extent that is the thinking

2 likes
50 views
3 comments

member from City University of New York, John Jay College of Criminal Justice

Important q.

2 years ago | like reply | 0 likes

searcher from Saint Louis University

I agree with Colin. It will likely take persistently higher rates before multiples come in as sellers are reluctant to decrease prices and buyers are plentiful. Once highly leveraged deals fall apart on financing, we could see sellers move on price. Cash/equity purchases will be stronger; however investors could want a higher return to compensate for a higher discount rate. While this is true on the macro level, certain industries which benefit from rising rates may not see multiple compression.

2 years ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Self Funded Acquisition: A few Things I Learned

Investor seeking Self-Funded Search Deals

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.