Buyers battle to find backing from banks
Wednesday, 20th March, 2013
By Kurtis J Eichler
Selling a business is hard in Broken Hill and those wanting financial backing from the big banks need to be more "proactive", a real estate agent says.
Traders looking to leave the retail industry are resorting to closing their doors as serious buyers struggle to get financial backing.
Menswear store 'Nickas' is the latest in a string of Argent Street businesses falling by the wayside in recent years.
Sue and Nick Shearer have owned and operated Nickas clothing shop for 10 years.
They'll shut their doors at Easter because they haven't been able to find a buyer for the business which Mrs Shearer said was "very profitable".
"There were a few people who were interested but they haven't got the money," Mrs Shearer says.
Suppliers have told the couple that a lot of business owners in their golden years are looking to get out, but younger ones are either not prepared to take on the investment or can't get a loan from the banks.
"There's no one coming up from underneath," said Mrs Shearer.
First National's Zeta Bennett said borrowing for a commercial business was hard and people needed to be "proactive".
"It's always quite difficult," Ms Bennett said.
"I would suspect that those who like the idea of buying a business can't get the backing but I don't know if there is a trend of the banks not lending."
Ms Bennett said retailers were putting overly-optimistic prices on their businesses.
"There are businesses for sale but some of them aren't even showing a profit and they are asking for a couple of hundred thousand," she said.
"This can sometimes lead people to think they can start the same business from scratch and others believe it's easier to stick to a day job."
Chamber of Commerce CEO Dennis Roach said businesses were often slow to sell locally.
"Some of the prices are a bit unrealistic," Mr Roach said.
Some prospective buyers also don't have the necessary skills to run a business and rely on the good will of the existing store to secure a loan," he said.
"Good will is worth nothing."
Mr Roach rejected the notion that the lack of young investors was killing Broken Hill businesses.
"I don't think business is falling off in Broken Hill. I think it's very stable."