Playing the Market

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April 01, 2025

by a searcher from Columbia University - Columbia Business School in Washington, DC, USA

Currently, it's a seller's market, and interest in the ETA asset class is ballooning. However, as interest rates go unchanged amid a possible recession and trade war, by this time next year, the leverage sellers have today will dissipate rapidly. Play the market and its uncertainty to your search advantage.

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Reply by a searcher
from University of Virginia in Washington, DC, USA
Seller financing was introduced to bridge the valuation gap during and after a downturn. It fundamentally changed pricing expectations. Sellers are anchored to higher multiples, and buyers, aided by available financing, continue meeting these prices. Economic conditions aside, the SBA is becoming stricter with less accommodative policies—higher fees, stricter underwriting, lower guarantees. There may be more of a flight to quality favoring well-capitalized buyers who can inject more equity and less debt.
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Reply by a searcher
from The University of Chicago in Chicago, IL, USA
I thought this was the case 18 months ago, yet there are so many more buyers and higher multiples. And those who acquired 18 months ago did just fine. I don't think it'll go back to the good ol' days. The fact is the search market was an untapped opportunity not long ago and now it's well discovered.
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