Increased lending driving deal activity
According to data from the Federal Deposit Insurance Corp., bank lending has increased by $37 billion during the first three months of the year, the greatest jump in any first quarter since 2008.
Bank lending is one of the primary indicators of market confidence and, whilst the economy has been gradually improving for some time, the significantly increased willingness to lend serves as a strong signal that the credit crunch is fading.
Increased lending also positively effects the M&A industry; whilst cash rich buyers are present and active in the M&A industry, some buyers will still use some form of external finance to secure deals.
With increased access to finance at record low interest rates available, along with cash rich financial backers and corporates sitting on huge sums of unspent cash held back throughout the recession, the M&A market outlook is looking very bright. This is particularly true for sellers, who are set to benefit from the increased demand for businesses.