The flow of money needed by loan applicants wanting to purchase a business has nearly dried up since the housing and banking crises in the last quarter of 2008. Understandably, that had a huge impact on small business sales
Dublin, CA (Vocus) March 4, 2010
The increase in the number of people able to successfully purchase a business in California last month, compared to February 2009, is seen as a positive sign for the economy, according to the head of the state’s leading online business marketplace.
Peter Siegel, founder and CEO of BizBen.com-businesses for sale in California, announced there were 1002 completed deals in February 2010, up from the 959 sales logged in the same month last year.
“We consider the improvement to be good news because when California’s entrepreneurs become more active in buying and selling businesses, what seems to follow is a higher level of spending by consumers, and a greater volume of business-to-business activity,” said Siegel.
He explained that the count of entrepreneurs able to purchase a business--a statistic his company reports every month--“reveals the level of optimism among leading participants in the business environment. These are the people buying restaurants, service companies and retail shops and other small businesses. What they are thinking and doing has proved to be a pretty reliable predictor about the attitude and ultimately the behavior of people throughout the economy.”
Among the large California counties, San Bernardino posted the biggest increase with 51 closed transactions last month, vs. 29 completed deals during February 2009. Los Angeles County saw an increase approaching 11% (268 sales last month and 242 sales during the same month last year). A 40% boost was recorded in San Francisco, where the 42 recently closed escrows topped the 30 deals completed in February 2009.
Riverside County reported 20 successful escrows during the just-completed month, compared to the 15 transactions during the second month last year. Minor growth was noticed in Orange County (94 vs. 92) and San Diego County (100 vs. 99)
Sacramento County recorded a decline in transactions from the 31 total in February 2009 to just 19 transactions last month.
“The flow of money needed by loan applicants wanting to purchase a business has nearly dried up since the housing and banking crises in the last quarter of 2008. Understandably, that had a huge impact on small business sales,” according to Siegel.
“A key reason we’re digging out of the slump is that California entrepreneurs are tired of waiting for banks to start cooperating. They’re finding other ways to complete their transactions. That’s why we’ve seen, as an example, more sales agreements involving a higher level of seller financing.”
Siegel noted that the “dozens of people I’ve talked to in the past couple of weeks--the brokers and people working to sell and to purchase a business--sound much more hopeful about completing their deals than they were just a month or so ago.”
BizBen.com has been matching people interested in selling and buying businesses since 1994, and has compiled and reported the month’s sales statistics, by city and by county for the past 12 years. Additionally, the site provides ideas, news and a blog page for entrepreneurs planning to sell or purchase a business, and the business brokers as well as the other professionals who serve them.
February sales results by California County (available at the BizBen.com Statistics page) are as follows:
Alameda: 46, Butte: 9, Calaveras: 4, Contra Costa: 29, El Dorado: 3, Fresno: 29, Glenn: 1, Humboldt: 1, Imperial: 5, Kern: 21, Kings: 1, Lassen: 3, Los Angeles: 268, Madera: 1, Marin: 6, Mendocino: 2, Merced: 6, Monterey: 10, Napa: 4, Nevada: 1, Orange: 94, Placer: 8, Riverside: 20, Sacramento: 19, San Bernardino: 51, San Diego: 100, San Francisco: 42, San Joaquin: 17, San Luis Obispo: 11, San Mateo: 17, Santa Barbara: 13, Santa Clara: 52, Santa Cruz: 20, Shasta: 3, Siskiyou: 1, Solano: 8, Sonoma: 18, Stanislaus: 13, Tehama: 2, Tulare: 14, Tuolumne: 3, Ventura: 22, Yolo: 4.
For more information: Peter Siegel