The complex interplay between market confidence and caution continues to define the current business environment, with full-service real estate firm Bayleys noting an upswing in the volume of businesses coming to the market for sale and an improved lending environment for prospective purchasers.

William Cheong and James Macmillan, national directors Bayleys Business, report revived optimism in the sector over the past three months with business acquisitions on the rise.

“The landscape has started to transform,” says Cheong. “Buyers are returning to the table, and lenders are showing a renewed willingness to support transactions.

“However, while this signals an upturn in optimism and is leading to fresh opportunities for those contemplating the purchase or sale of a business today, it’s not a one-size-fits-all market landscape. Some businesses are at the top of their sectors and capitalising on strong market positions, and others are battling to remain relevant and viable in an increasingly competitive and often volatile market.”

Cheong says right across the market, people are looking for certainty and trying to see through the lag between the easing of monetary policy and an improvement in the overall economy. The recent OCR hold by the Reserve Bank serves to reinforce the cautious optimism theme and even the big players in commerce are being prudent.

“Although certain established owners possess robust balance sheets, many well-resourced business leaders remain cautious in the face of ongoing challenges, and they continue to carefully assess potential risks and opportunities before making strategic decisions.

“But regardless of market friction, both seasoned entrepreneurs and first-time investors are pushing on, recognising the current climate as a window of opportunity and eager to capitalise on established enterprises.”

Financial institutions and private lenders have increased their appetite for lending, making finance more accessible and flexible for qualified buyers. Macmillan says the last quarter saw improved approval rates, competitive interest terms, and an expanded range of funding options.

“This renewed eagerness from lenders is helping to fuel the uptick in business transactions, empowering buyers to pursue opportunities that might have previously seemed out of reach.

“The combination of robust buyer demand and supportive lending conditions is driving activity within the Bayleys Business team for both listed and off-market opportunities and we’ve seen some compelling deals done.

“Recent off-market transactions of note were an Australasian conference organiser business which was sold to a trade party, and an online fashion retail business sold to an offshore party. We also have a couple of significant offerings under contract in the manufacturing sector.” 

Off-market opportunities currently available through Bayleys span the automotive, service, import and distribution, and manufacturing sectors with significant portfolios comprising two to five assets and with enterprise values between $350,000 to $12 million.

Cheong says in terms of vendor sentiment and stance on value, there's been a notable shift.

“While vendors of businesses with strong balance sheets remain steadfast in their price expectations, there is an emerging element of fatigue among vendors that have faced significant hurdles since the pandemic. In many cases, initial resilience has evolved into a practical willingness to see a transaction take place, with vendors showing greater flexibility on terms and, in some instances, price. This shift is resulting in more businesses coming to the market for sale.

“It is definitely a market full of opportunity right now. The combination of robust buyer demand and supportive lending conditions has created a dynamic marketplace where deals can be structured efficiently and with confidence.

“Our team is across the latest market insights and oversees a diverse portfolio of businesses for sale. We encourage buyers and vendors to engage with us for a confidential, no-obligation conversation about ways to leverage the evolving landscape.”