How Interests Rates Can Affect a Business’s Valuation

When it comes to either buying or selling a business, interest rates can affect a business’s valuation. Transactions, big or small, generally have some portion of the purchase price financed with debt.

As the cost of financing the debt portion of a purchase transaction increases, the value placed on a business can go down to cover the increased financing cost.  In addition, buyers become more selective of businesses they are considering buying due to the higher cost of financing.

If you are considering selling or buying a business now may be the time to go to market to complete a transaction, before interest rate increase.

Please contact The Siburg Company, anytime, to discuss your business’s strategic plans.

The Siburg Company specializes in buy-side and sell-side mergers and acquisitions, and strategic planning consulting services.

Contact us at (480) 502-2800