Asset finance brokers should be helping their SME clients to get ahead through mergers and acquisitions, according to one major non-bank lender.
The time is right for SMEs to consider buying up other businesses and can even leverage their buyout against the assets of the company that this being bought, with commercial brokers able to offer financing for such deals.
The pandemic has led to more distressed businesses ripe to be taken over, while the cost of credit is currently very low.
“You have to strike while the opportunities are there,” said ScotPac senior executive Craic Michie.
“Depending on which sector, anecdotally ScotPac is seeing many owner-managed businesses that have considered the pandemic a bit of a circuit-breaker and after months of disruption can see life on the other side of running a business.”
“These opportunities don’t come around every day so SMEs looking to grow by acquisition need to strike while the iron is hot.”
“The fact that there are so many opportunities on the market now. I can’t remember a busier time for mid-market M&A.”
Asset finance brokers can be on hand to best advise their clients to take advantage of this situation, with leveraging against the assets of the SME being bought an option.
“Asset finance brokers are well placed to look at their clients’ balance sheets to see what assets are available and help them find the capital to complete M&A deals,” said Michie.
“Brokers should know that it’s important for their clients to get advice to make sure they are complying with the law – and subject to that advice, business assets can be used to provide the ongoing working capital to run the acquired business or even used to complete the acquisition.”
“Legal advisors will make sure that creditors or other shareholders are not prejudiced by the action of using assets to buy the business.”
