Orange County Register

Sales of Orange County businesses fell off the cliff in November, dropping 67% to 98 sales compared to 298 in November, 2007, according to BizBen, a web site specializing on California business sales.

It is the lowest number of sales in the county since April 2005 and the lowest November in at least five years, by Bizben records, which are compiled from county records plus proprietary information for businesses sold without an escrow.

Here are November sales for Orange and the surrounding counties:

Year-to-date, Orange County sales are down 29.2% and statewide sales are off 19%.

“Sales bounced in October after the Olympics and other distractions, but now everyone is waiting to see what will happen with the economy and many are taking the rest of the year off,” said Peter Siegel, owner of BizBen and 25-year veteran of the industry. The October sales were up from September but down from October 2007.

“Typically in the past when times were good, people wanted to wrap things up before the end of the year,” he added. “I’ve never seen it this bad.”

Several factors weigh heavily on business sales:

• Banks still lack liquidity and therefore are unable/unwilling to lend even with a guarantee from the U.S. Small Business Administration
• Buyers no longer have any equity in their homes to tap in order to buy a business, which was a common source of capital during the real estate boom
• Buyers’ stock portfolios, another source of money to buy a business, have collapsed with the stock markets.

“People are backing out of deals because they can’t get the money,” Siegel said. “The onus is on the sellers to take back a note to help finance the deal. It used to be they would take back a note worth 30% to 70% of the sale price.”

He expects December sales to be quiet and hopes sales will pick up again in January.

More economic news…..

• Poll: How is your company coping with economic downturn?
• UPDATE: Oh no! 9.25% sales tax on some service businesses
• O.C. yearlong job loss second highest in U.S.
• 90% of U.S. banks tighten small-business credit
• September O.C. bankruptcies hit 3-year high
• And now from Wall Street…bets on recovery
• Calif. unemployment extension checks delayed until mid-Dec.
• Fed plan should stem credit-card crunch
• Group calls for 180-day foreclosure moratorium
• OMB: Revenge of the nerds
• State Democrats want car tax, income tax hikes
• O.C. auto sales plunged 40% in October
• O.C. mortgage rate drop a “miracle”

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