Overview of the PeerComps Transaction Database
There are a few well known resources for small business, private company transaction data. The below provides an overview of PeerComps and some unique characteristics that are different from other business valuation resources.
The PeerComps studies of small business sales go back to 1998 and today this database reportedly has over 7,000 deals from SBA lenders and an average of 100 new comps added each month. This latter point is what makes PeerComps unique. Instead of data provided by business brokers and transaction intermediaries, the transaction data is provided by participating SBA lenders.
Generally speaking, the fact that these small business deals made in through SBA lenders, means the quality of these businesses are higher and thus the multiples may also be higher than you'll find in other transaction databases.
The founder of this database is a highly regarded business valuation expert, which coupled with SBA underwriting standards to ensure integrity of the data, makes this a preferred database for many brokers. This is especially true for stable and consistent cash-flow generating businesses.
Three elements are contained in either the asking price or sale price that is reported - inventory, fixtures & equipment and intangible assets (including goodwill). Cash, accounts receivable, real estate and all liabilities are excluded. Approximately 90% of the transactions are asset sales and the remainder have been converted to an asset sale.
Each transaction is categorized by an NAICS code and can be analyzed based on numerous parameters including location, revenue, discretionary earnings, etc.
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Disclaimer: The information contained in this article is for general guidance only. The information presented should not be acted upon without the advice and guidance of a professional tax, legal, or financial adviser who is familiar with all the relevant facts.