“Note: Since this was written, the prime has dropped to 4% and furthur rate cuts are possible.-Chris”
One item not receiving a great deal of attention through the financial crisis is the fed’s action causing the prime interest rate to drop from 5% to 4.5%.
Many business loans are prime based, so this will be welcome relief for many business owners. In addition, interest rate are very low for those who qualify. Banks are hungry to make loans in their narrower preferred categories. SBA loans are still being made (albeit with tougher rules) and funding certain business acquisitions and franchise purchases are in many lender’s sweet spot.
These are advantageous times to buy a business since multiples are down and lenders will be your willing due diligence partner to make sure their monies are safe.