The last month has been a particularly short one from a business perspective and a combination of Easter, fine weather and the royal wedding have reduced the number of working days in the month to something like ten with many people taking two weeks’ break from work.
There was an interesting article in last week’s Sunday Times about the spike in interest from buyers in properties with incomes. We have seen that activity too although the article went on to say that buyers were very focused on the profit figures and were not tempted to over-pay even in a competitive bid situation. I would completely agree with that analysis. If you are selling a freehold business then I do think that you need to look carefully at your asking price alongside your profit stream and ask yourself if that profit can support the size of mortgage required to buy your property. I or any of my colleagues at Amberglobe would be happy to discuss this with you.
I do get the strong feeling that the market is improving and that if the weather remains fine then consumer confidence will increase. This does not mean though that I foresee prices rising any time soon but rather that more buyers will enter the market, more transactions will happen and there will be more money sloshing around as a result of house sales freeing up.
I should also mention that there are noises being made in government that the rules about Energy Performance Certificates are about to be tightened up and that all commercial properties for sale or lease will be required to have EPCs in place before being marketed for sale. Frankly this is the last thing we all need and I do appreciate that having to pay for an EPC prior to a sale being agreed is particularly annoying. In anticipation of these changes we have negotiated a staggered payment system with a number of independent EPC providers who will accept payment over a number of months. This will hopefully significantly ease the cashflow burden on you and of course your EPCs will be valid for ten years. If you would like to discuss this or arrange for a quote then please contact us.
http://www.amberglobe.co.uk/
Showing posts with label commercial finance. Show all posts
Showing posts with label commercial finance. Show all posts
Tuesday, 10 May 2011
Friday, 4 March 2011
February Report
Since my last report a couple of things have happened within Amberglobe:
The first is that we sold our first £2.5m+ business in 18 months. http://www.amberglobe.co.uk/sales.aspx We have another £1m+ sale scheduled for next month. To me these are early signs of the market beginning to improve. A year ago such sized deals were pretty much impossible to get away but both deals had significant levels of debt being advanced by banks and I think they are signs of an improving market.
I should however say that this does not mean that values are improving but just that bigger deals are finally happening. Both of these bigger deals are being done at very realistic prices and both have involved a level of vendor finance being provided.
The second thing that has happened here is that we have appointed an in-house solicitor http://amberglobelegal.com/ to provide exceptionally well-priced legal services to our vendor clients. For too long we have watched law firms muck up deals and provide a poor service to both buyers and sellers. By having an in-house solicitor handling our clients’ sales not only do I believe that our clients will be serviced efficiently and effectively but also at significantly better prices than can be obtained elsewhere. Our in-house solicitor is called Naushad Rahman and she has been practising law for over 13 years for both a large London firm and also on her own account, specialising in corporate finance and commercial law http://amberglobelegal.com/page/about/26/. If you would like to receive a quote for the legal work on your sale or indeed for any commercial law issue, then Naushad can be contacted on nr@amberglobe.co.uk or http://amberglobelegal.com/contact-us.php or 0800 707 6370.
Check out all our businesses for sale on http://www.amberglobe.co.uk/
The first is that we sold our first £2.5m+ business in 18 months. http://www.amberglobe.co.uk/sales.aspx We have another £1m+ sale scheduled for next month. To me these are early signs of the market beginning to improve. A year ago such sized deals were pretty much impossible to get away but both deals had significant levels of debt being advanced by banks and I think they are signs of an improving market.
I should however say that this does not mean that values are improving but just that bigger deals are finally happening. Both of these bigger deals are being done at very realistic prices and both have involved a level of vendor finance being provided.
The second thing that has happened here is that we have appointed an in-house solicitor http://amberglobelegal.com/ to provide exceptionally well-priced legal services to our vendor clients. For too long we have watched law firms muck up deals and provide a poor service to both buyers and sellers. By having an in-house solicitor handling our clients’ sales not only do I believe that our clients will be serviced efficiently and effectively but also at significantly better prices than can be obtained elsewhere. Our in-house solicitor is called Naushad Rahman and she has been practising law for over 13 years for both a large London firm and also on her own account, specialising in corporate finance and commercial law http://amberglobelegal.com/page/about/26/. If you would like to receive a quote for the legal work on your sale or indeed for any commercial law issue, then Naushad can be contacted on nr@amberglobe.co.uk or http://amberglobelegal.com/contact-us.php or 0800 707 6370.
Check out all our businesses for sale on http://www.amberglobe.co.uk/
Wednesday, 16 February 2011
A Window on Business Sales
I am very pleased to announce the recent sale on behalf of its clients of a Nottingham based aluminium windows and curtain walling manufacturer for an initial consideration of £2.3m. http://www.amberglobe.co.uk/sales.aspx
This is our biggest deal since the banking crisis and I hope is a sign of recovering confidence in the business sales market. The transaction was a Management Buy-Out and Buy-In and was put together with a combination of bank debt and equity provided by both the incoming and the existing management. It has been a very long and drawn out process getting a bank to commit to the deal but we got there in the end. The deal really only happened because the vendors were prepared to take a sensible, realistic and helpful approach. I have to say that despite what is printed in the papers it is still incredibly difficult to raise debt on business purchases http://www.amberglobe.co.uk/index.aspx and until bank funding becomes easier the market conditions will remain tough. We are literally swamped with buyers looking for good well priced business all over the country http://www.amberglobe.co.uk/search.aspx and if the banks do honour their commitment to Project Merlin then I would hope that this deal will be the first of many!
Rupert Cattell
http://www.amberglobe.co.uk/
This is our biggest deal since the banking crisis and I hope is a sign of recovering confidence in the business sales market. The transaction was a Management Buy-Out and Buy-In and was put together with a combination of bank debt and equity provided by both the incoming and the existing management. It has been a very long and drawn out process getting a bank to commit to the deal but we got there in the end. The deal really only happened because the vendors were prepared to take a sensible, realistic and helpful approach. I have to say that despite what is printed in the papers it is still incredibly difficult to raise debt on business purchases http://www.amberglobe.co.uk/index.aspx and until bank funding becomes easier the market conditions will remain tough. We are literally swamped with buyers looking for good well priced business all over the country http://www.amberglobe.co.uk/search.aspx and if the banks do honour their commitment to Project Merlin then I would hope that this deal will be the first of many!
Rupert Cattell
http://www.amberglobe.co.uk/
January Report
I am sure that like me you are keeping a weather eye on the property market and the economy in general. The papers have obviously decided to continue spreading the general doom and gloom from last year and are trumpeting how fragile is the economy and how we could fall back into recession. I have to say that this is not doing any of us any favours. Consumer confidence is a fragile thing at the best of times and at the moment people are holding back from making big decisions because they are scared.
And yet despite all that we are seeing plenty of buyer activity and in fact in January we recorded the highest level of buyer enquiries for 12 months. However buyers are definitely both very cautious and are also trying to be pretty cute. I have had a number of conversations with buyers who have said that they are going to wait and see if prices drop further before they make their move. This unfortunately becomes something of a self-fulfilling prophesy as prices move down to meet these buyers’ expectations and that has a domino effect across the board. What you don’t want to be then is holding expensive stock when all your competitors have reduced their prices.
To be frank I don’t see any likelihood of prices rising in the next 10 to 12 months. In fact I think prices will continue to drift downwards caused by a combination of distressed sellers, cautious and savvy buyers and a lack of first time home buyers preventing sellers further up the chain from being able to sell their houses.
We are also seeing Bank Valuers pricing in this expected fall in prices when they do their mortgage valuations. So even if a deal has been agreed, once the valuation has been done, the deal is having to be renegotiated.
Don’t forget however that if you’re seeing your asking price reduce, so too is the seller of the next property you want to buy. Consequently things tend to even out.
If your business has been on the market for a while now and you are not seeing much activity then I think that you should be talking to us about your asking price. Traditionally vendors price their businesses at some 10-20% above their expected sale price on the basis that they are expecting to be chipped. I think however the rules have changed and you should be pricing your business at what we think is the market price – that way you are likely to see more activity and more buyer interest. Then when you get an offer you can decide whether or not it is acceptable having regard to how much of a reduction you can negotiate off your next purchase.
http://www.amberglobe.co.uk/
And yet despite all that we are seeing plenty of buyer activity and in fact in January we recorded the highest level of buyer enquiries for 12 months. However buyers are definitely both very cautious and are also trying to be pretty cute. I have had a number of conversations with buyers who have said that they are going to wait and see if prices drop further before they make their move. This unfortunately becomes something of a self-fulfilling prophesy as prices move down to meet these buyers’ expectations and that has a domino effect across the board. What you don’t want to be then is holding expensive stock when all your competitors have reduced their prices.
To be frank I don’t see any likelihood of prices rising in the next 10 to 12 months. In fact I think prices will continue to drift downwards caused by a combination of distressed sellers, cautious and savvy buyers and a lack of first time home buyers preventing sellers further up the chain from being able to sell their houses.
We are also seeing Bank Valuers pricing in this expected fall in prices when they do their mortgage valuations. So even if a deal has been agreed, once the valuation has been done, the deal is having to be renegotiated.
Don’t forget however that if you’re seeing your asking price reduce, so too is the seller of the next property you want to buy. Consequently things tend to even out.
If your business has been on the market for a while now and you are not seeing much activity then I think that you should be talking to us about your asking price. Traditionally vendors price their businesses at some 10-20% above their expected sale price on the basis that they are expecting to be chipped. I think however the rules have changed and you should be pricing your business at what we think is the market price – that way you are likely to see more activity and more buyer interest. Then when you get an offer you can decide whether or not it is acceptable having regard to how much of a reduction you can negotiate off your next purchase.
http://www.amberglobe.co.uk/
Friday, 10 December 2010
Business Sale Checklist
Many business sales are delayed unnecessarily or even fall over because of relatively minor problems occurring at the wrong time.
So as to ensure that you have removed all possible barriers to being able to successfully complete the sale of your business, please find below a check-list that I hope you will find useful:
1. Title deeds (Freehold) - If your business is a freehold subject to a mortgage then your Mortgagee will be holding the title deeds.
Do you know your Mortgagee’s details and your mortgage account number:
If your freehold is not subject to a mortgage, do you know the location of your title deeds.
2. Title deeds (Leasehold) - If your business is a leasehold then what is the location of your lease. Is it with your solicitors or your bank?
Do you know your Landlord’s details or their agent’s details?
3. Fixtures & Fittings
We suggest you make an Inventory/list of fixtures and fittings and/or plant & equipment included in the sale.
4. Apportionment of price
We recommend that you discuss with your Accountant the apportionment between goodwill, fixtures and fittings and property.
5. Stock
Check your approximate stock level carried.
6. Employees
You will be required to provide the purchaser with the full details of your employees.
We recommend that you put together a file containing their names, addresses, dates of birth, hours worked, rates of pay and lengths of service. You will also need to provide the purchaser with copies of employment contracts, disciplinary details, holiday entitlements, bonus details, pensions and life cover details. Again we recommend that you start putting together that information in a file if you have not already done so.
7. Third Party Contracts
You will be required to provide the purchaser with details of any service/supply contracts for the business, e.g. regular suppliers, maintenance contracts for alarms, lottery and Paypoint details, advertising contracts etc
Also, you will need to provide the purchaser with details of any other commitments that you have paid in advance and that you will want the buyer to repay on completion.
8. Permits & Licences
You will need to provide copies of any Licences, Permits or Authorisations that allow you to trade; e.g. premises licence, Ofsted, Post Office etc.
Have you procured a Commercial EPC (Energy Performance Certificate) for your business premises? If not, then we can provide a quote.
9. Planning Permission
Please check your Planning Approval(s). Do you have planning consent for your use of the building?
If you have at any time increased the size of your building or business, did you get the necessary planning consent for that increase? If you did not get consent then this will almost certainly delay completion and possibly cause the sale to fall apart, consequently we recommend that you ensure that you have all necessary consents.
Do you have Building Regulations consents for any works you have carried out? Do you have plans/details of such works?
10. Business name
Are you happy to let the purchaser use it?
Do you intend to keep working or setting up in the same business in the same area after the sale?
Obviously if you wish to keep working in the same area or if you wish to retain the business name then this is likely to affect a sale and the goodwill value.
11. Website
If your business has a website, usually a purchaser will be buying this as well.
Do you know who is hosting your website?
Do you know who owns the domain name(s)?
Are you under any contracts regarding the hosting or management of your website?
We recommend that you check to ensure that you can and know how to transfer the website to the purchaser. We strongly recommend that you do not wait until completion to do this as the process can take some considerable time.
http://www.amberglobelegal.com/
http://www.amberglobe.co.uk/
So as to ensure that you have removed all possible barriers to being able to successfully complete the sale of your business, please find below a check-list that I hope you will find useful:
1. Title deeds (Freehold) - If your business is a freehold subject to a mortgage then your Mortgagee will be holding the title deeds.
Do you know your Mortgagee’s details and your mortgage account number:
If your freehold is not subject to a mortgage, do you know the location of your title deeds.
2. Title deeds (Leasehold) - If your business is a leasehold then what is the location of your lease. Is it with your solicitors or your bank?
Do you know your Landlord’s details or their agent’s details?
3. Fixtures & Fittings
We suggest you make an Inventory/list of fixtures and fittings and/or plant & equipment included in the sale.
4. Apportionment of price
We recommend that you discuss with your Accountant the apportionment between goodwill, fixtures and fittings and property.
5. Stock
Check your approximate stock level carried.
6. Employees
You will be required to provide the purchaser with the full details of your employees.
We recommend that you put together a file containing their names, addresses, dates of birth, hours worked, rates of pay and lengths of service. You will also need to provide the purchaser with copies of employment contracts, disciplinary details, holiday entitlements, bonus details, pensions and life cover details. Again we recommend that you start putting together that information in a file if you have not already done so.
7. Third Party Contracts
You will be required to provide the purchaser with details of any service/supply contracts for the business, e.g. regular suppliers, maintenance contracts for alarms, lottery and Paypoint details, advertising contracts etc
Also, you will need to provide the purchaser with details of any other commitments that you have paid in advance and that you will want the buyer to repay on completion.
8. Permits & Licences
You will need to provide copies of any Licences, Permits or Authorisations that allow you to trade; e.g. premises licence, Ofsted, Post Office etc.
Have you procured a Commercial EPC (Energy Performance Certificate) for your business premises? If not, then we can provide a quote.
9. Planning Permission
Please check your Planning Approval(s). Do you have planning consent for your use of the building?
If you have at any time increased the size of your building or business, did you get the necessary planning consent for that increase? If you did not get consent then this will almost certainly delay completion and possibly cause the sale to fall apart, consequently we recommend that you ensure that you have all necessary consents.
Do you have Building Regulations consents for any works you have carried out? Do you have plans/details of such works?
10. Business name
Are you happy to let the purchaser use it?
Do you intend to keep working or setting up in the same business in the same area after the sale?
Obviously if you wish to keep working in the same area or if you wish to retain the business name then this is likely to affect a sale and the goodwill value.
11. Website
If your business has a website, usually a purchaser will be buying this as well.
Do you know who is hosting your website?
Do you know who owns the domain name(s)?
Are you under any contracts regarding the hosting or management of your website?
We recommend that you check to ensure that you can and know how to transfer the website to the purchaser. We strongly recommend that you do not wait until completion to do this as the process can take some considerable time.
http://www.amberglobelegal.com/
http://www.amberglobe.co.uk/
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