As we approach mid-2025, the UK interest rate sits at 4.5%, marking a stabilisation period after a volatile few years. For business owners considering a sale — and buyers exploring acquisitions — this shifting economic backdrop brings both opportunity and urgency.

At Goodwins Business Brokers, we’re seeing how this monetary environment is directly impacting deal volumes, buyer behaviour, and business valuations across multiple sectors.

📈 Interest Rate Trends: Where Are We Now?

After peaking at 5.25% in 2023, the Bank of England has cautiously reduced rates to 4.5% in response to cooling inflation and slowing consumer demand. While further rate cuts are anticipated — potentially dipping to 4% by late 2025 — the Bank remains cautious to avoid reigniting inflationary pressures.

For the business sales market, this reduction is significant. It lowers the cost of capital for potential buyers, improves lending conditions, and renews confidence in medium-term investment planning.

💼 What This Means for Business Buyers

Buyers — whether individual entrepreneurs, corporate acquirers, or investor-backed groups — are finding more flexibility in deal structuring as:

• Acquisition finance becomes more affordable
  Lower interest rates directly improve debt service ratios, allowing buyers to secure higher loan-to-value (LTV) deals without overstretching.
• Asset-rich businesses become more attractive
  With borrowing costs lower, businesses with vehicles, equipment, or freehold premises (like scaffolding, commercial cleaning, and transport firms) are regaining favour.
• Confidence is returning to growth-focused buyers
  Rather than focusing purely on distressed or undervalued assets, buyers are once again considering well-performing, cash-generative businesses that support expansion.

As a result, we are already seeing increased activity in businesses priced between £150K and £1M, especially those with strong adjusted net profits, recurring revenue, and efficient systems.

🧾 For Business Owners: Why This Market Matters

If you’ve been holding off on selling due to market uncertainty, now may be your moment. Here’s why:

1. Improved Buyer Affordability

Buyers can now borrow at more favourable rates — which means they can pay more, or at the very least, move forward faster with confidence.

2. Low Market Supply

There remains a shortage of well-prepared, profitable SMEs coming to market — especially in sectors like healthcare, trades, B2B services, and sustainable brands. If your business is in this category, you may command a premium.

3. Window of Predictability

Interest rates may remain in the 4–4.5% range for a limited time. With a general election on the horizon and potential tax reforms ahead, now is a rare window where policy, inflation, and rates are aligned enough to give both parties certainty.

4. Valuation Stability

Buyers are no longer pricing in risk premiums to the same extent they were in 2022–23. That means valuations are holding firm, particularly for businesses with consistent profitability and no reliance on owner input.

📊 Sectors Seeing Strong Demand

Based on current deal activity, we’re seeing the most buyer interest in:

• 🧱 Scaffolding & Construction Services – Especially those with owned assets and long-term contracts
• 🧼 Commercial Cleaning & Maintenance – Recurring income and low capex make these attractive
• 🧴 Health & Aesthetics Clinics – CQC-accredited, professionally led setups in affluent areas
• 📦 E-commerce Brands – Lean operations with strong margin products and clear growth channels
• 🚚 Courier & Transport Firms – Particularly those with asset-light or scalable contract models

🛠️ What Should Sellers Do Now?

If you’re a business owner contemplating a sale, here’s our advice for Q2–Q3 2025:

• ✅ Get a professional valuation — Ensure your price reflects current demand and interest rate conditions
• ✅ Prepare early — Buyers move quickly, but due diligence still takes time. Have 2–3 years of clean accounts ready
• ✅ Position for growth — Highlight future opportunities buyers can leverage (e.g. digital marketing, geographic expansion, or cost savings)

🏁 Final Thoughts

With interest rates now at 4.5%, the business sales market is regaining momentum. Whether you’re buying your first business or preparing to exit after years of hard work, understanding how monetary policy affects your strategy is critical.

At Goodwins Business Brokers, we work with both sellers and buyers to navigate this environment — ensuring every deal is built on real value, trust, and long-term sustainability.

📩 Thinking of buying or selling a business?
Let’s have a confidential chat — no obligation.
📞 0330 236 7030
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🌐 www.goodwinsbrokers.co.uk