The Fed Just Cut Rates—Here’s Why That’s Good News If You’re Thinking About Selling Your Business

Today, the Federal Reserve cut interest rates—and more cuts are expected before the end of the year. If you’re a business owner even thinking about selling in the next 12–24 months, this move matters more than you might think.

Here’s why:

1. Lower Rates = More Buyers With Bigger Budgets

When interest rates drop, it becomes cheaper for private equity firms, strategic buyers, and other acquirers to borrow money. That expands their buying power. Deals that might’ve been out of reach at a 7% cost of capital suddenly look much more attractive at 5%.

In short: more buyers can afford to do deals, and they’re willing to pay more to win them.

2. Higher Valuations Come Back Into Play

Over the past couple of years, high interest rates have put downward pressure on valuations. Buyers were more cautious, demanding lower multiples to offset their financing costs.

But as rates fall, risk tolerance goes back up. Multiples stabilize—or even rise. Sellers regain leverage. If you've been holding off on selling because you didn't want to take a haircut on your valuation, this shift may bring you back into the sweet spot.

3. Increased Deal Flow Sparks Competitive Bidding

In a lower-rate environment, M&A activity usually heats up. With more buyers chasing deals, competition increases. That’s when things get interesting: a competitive process often pushes valuations higher and gives sellers more favorable terms.

If you’re positioned well, you can benefit not just from a sale—but from a strategic sale on your terms.

4. PE Firms Need to Deploy Capital—and Rate Cuts Light the Fuse

Private equity firms are sitting on record amounts of dry powder. But high rates have made many hesitant to pull the trigger. Now, with the cost of capital trending down, that money is starting to move again. PE firms will be more aggressive in finding good businesses to acquire before valuations climb further.

That makes now a great time to prepare to sell, even if you’re not ready to sign the dotted line tomorrow.

What Should You Do Now?

If you’ve been on the fence about selling—or just curious about what your business could be worth—it’s time to have that conversation. Rate cuts don’t instantly create a seller’s market, but they do set the conditions for one.

Timing matters. A proactive move today could mean a better valuation, better terms, and a stronger exit tomorrow. If you have questions about what the rate cuts (not to mention the new provisions in the One Big Beautiful Bill) mean for your exit plan, set up a time to talk with our team today.