You're watching...
Len Tannenbaum, Fifth Street Finance Corp. CEO, on how business owners can decide when it’s the right time to sell.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Like mixed signals for our company ADP employment report unexpectedly showed an increase in private sector employment and small business lending rose in May.
To its highest level so far this year so once CEO says he's improving conditions make it the perfect time to sell your business outlet.
Outgrow it.
-- and Bob CEO of Fifth Street Finance Korb joins us now with his reasons to sell.
So is this -- throw in the towers this capitalize when the going is good.
Well this is a lot of good reasons to sell one of them.
-- expiration of the bush tax cuts so anyone who sells their businesses here plus 5% any of the receipts you get.
To obamacare.
But a lot of people -- worried about obamacare both in costs of the employees and the three point nine to three point 8% additional tax.
I've traveled the country -- my -- keeping America competitive and what we found a small business owners are really scared about the impact of this.
Fact I think about fox next Thursday night talking about that with some small business owners.
Three.
I and I think that's what's really important.
And I met with -- -- of -- today who -- confirm that's our view is eighteen to 24 months the economy has to go up.
And -- 224 months just -- wall of liquidity has some relation.
We have Japan has emerged from -- -- like a partisan Sumitomo with the increased the consumption tax but of course you've got Europe.
Number four and you know this is just -- important lenders have lots of money we have a 1000000003 and assets we have 400 million deploy their lots -- wonders with money.
There's a good time to cite your business 'cause we have -- -- but according to to number five could register then we got some merger and acquisition activity numbers and the -- the -- is down about 15% for the first half of this year have comparatively over year over year.
So what do you believe is going to be the market to be buying all these businesses that -- are telling sell your business now.
Well what you're -- seller you of something called the earn out so you really have to.
Benchmark what's gonna happen next year in this chair chip certainty for an eighteen month periods a good time I greet him a little surprised -- -- is down.
I think the last come -- shall I -- would be a big big fourth quarter with the.
Globally it's particularly since they're yields nowhere to be found I mean it this is the time and all that cash could be put into play.
And that's part of the fun of buying -- business let let me just push back a little bit.
Because some people say that we have been repressing demand not is that a lot of people out there are a lot of partners want a row right a lot of businesses want to expand but they've been so afraid for all the reasons you correctly.
Enunciated.
That is if there is a very big change in economic policy United States one that's more growth friendly.
Maybe this is a time when businesses could take off so that means now's the time we should hold love your small business if you have think it has potential there what happens of this more certainty what happens if the Republicans take all three houses and have certainty or.
They don't tip off three houses and Obama decides okay.
We're gonna compromise and develop certainty either way you're actually right to be great time to grow.
But you have this uncertainty with.
Had this government figured out it's never been -- -- color are actually their businesses they grow to love their businesses particularly if -- businesses that they themselves have grown.
And they would want to be there when that business takes off but I'm empathetic guy Kerr from one person in a basement over fifteen years so we're 47 people and a 1000000003 and assets.
And it's my baby it's my fourth child and ask my -- don't -- -- I think that the economy might take off.
Of that -- number five point that we just put up on the screen and that is one thing that's certain for the foreseeable future.
Or at least certain point in 2014.
That we -- will be low interest rates very low borrowing costs right.
That's a point to senate to hold on to a business NSA to sell -- -- this other ways besides selling by the way when it went -- entrepreneur sells their business they shut rollover some equity.
They should keep their skin in the game.
Just -- you let private equity or strategic take it.
You want to have a continuing interest in the business and so when I say sell your business I don't mean your -- -- walking away.
When I mean as -- you're having a five year transition plan.
And walking in growing your business but also maximizing value -- itself the buffet you get to stay a product that's right Lexus managers I got adds I don't.
Quickly what's the unemployment number tomorrow what's your guess.
I think unemployment in this continue to be challenging -- 67 companies I think.
You know plus plus 150 ish type of thing would be my -- but of course it's a -- -- the unemployment rate.
I think the unemployment rate is manipulate an election year so I have no idea.
And then about an honest man -- thank you very much that's why your paid the big.
I think.
