Reading an Annual Insight Report: Rates, Deal Volume and Buyer Leverage

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 704 words

An annual insight report on business sales is most useful to a buyer for three things: it shows how borrowing costs are shaping what buyers can afford to pay, whether buyers or sellers currently hold more leverage, and how prepared the owners coming to market are. The specific figures date quickly. Those three questions are worth asking every year.

This page once covered a 2022 report, written as rising interest rates were slowing deal activity late that year. The lessons about rates and leverage apply whatever level rates happen to be at now.

Borrowing costs set the ceiling on your price

Most acquisitions are financed partly with debt, and the business you buy has to make those payments out of its own cash flow. When interest rates rise, the same cash flow supports a smaller loan, so a buyer who relies on debt can afford to pay less, or must put in more equity to pay the same price. When rates fall, the reverse happens. That is why deal activity and prices often soften when borrowing gets more expensive, even though the businesses themselves have not changed.

For you as a buyer, the practical step is to base your offer on the loan you can actually get today, on today's terms, with a margin for a weaker year. Our page on business financing explains the usual structures.

Ask your lender whether the rate is fixed or can change over the life of the loan. If it can change, run your numbers at a higher rate as well as today's, and make sure the business could still pay you a living and meet its obligations. A purchase that only works if rates stay where they are is carrying a risk you do not control.

Who holds the leverage

Reports often say whether the market favors buyers or sellers. When fewer buyers can finance purchases, sellers of average companies may have to accept lower prices or more flexible terms, such as a seller note, where the seller accepts part of the price over time. Well-run companies with steady earnings still draw competition in almost any market. Leverage also shifts within a single deal: a seller with other interested buyers holds more of it, and a seller who needs to close by a certain date holds less. Learn which situation you are in before you set your terms.

Do not assume a buyer's market applies to every company. If the business you want is strong, expect other bidders, and compete on certainty and terms as well as price. Sellers and their advisors look hard at whether a buyer's financing is real; our answer on how sellers evaluate buyer financing shows what they check.

Many owners come to market unprepared

Owner surveys in these reports regularly find that many owners have no exit plan and do not know what their business is worth. For a buyer, that cuts both ways. An unprepared seller may hold unrealistic expectations, keep records that take time to untangle and have no plan for handing over customers and staff. The same seller may also be open to a fair offer from a buyer who explains value clearly and makes the process easy to follow.

Be patient with an owner selling for the first time, but be firm about records. If the financial statements do not reconcile with the tax returns, that has to be resolved before you can price or finance the deal.

Pressures that persist whatever the year

Owners and buyers keep returning to the same concerns in these reports: financing costs, rising wages and materials, and dependable supply. When you evaluate a company, look at how it handled those pressures in its own history. A business that protected its margins by raising prices, finding second suppliers or holding on to trained staff has shown you something no market report can.

Where MDR & Associates fits

We represent owners selling Texas companies. Every company we bring to market has a financial recast and a realistic opinion of value behind it, so buyers deal with prepared sellers rather than hopeful ones. Buyers who want to see those companies can register, sign a confidentiality agreement and complete a financial profile through our buyer page.

Where this fitsBuy a business in Texas →

Questions owners ask next

Should I wait for interest rates to fall before buying a business?

Waiting has costs of its own. Cheaper borrowing tends to raise what buyers can pay, so prices may climb as rates fall, and good companies sell in any rate environment. Many buyers find it better to buy a sound company at a price today's loan terms support, and refinance later if rates come down.

How can I tell if a seller is realistic about price?

Ask how the asking price was set. A realistic seller can point to adjusted earnings and to what similar companies sell for, often with an advisor's recast behind it. A seller who cites the figure they need for retirement, or a price a friend received, will probably need time before agreeing to a deal.