Your trusted key employees already understand your firm’s unique culture, projects, and client relationships; with SBA loans for business purchase and the Step-Up Legacy Plan™, they can become owners with a modest down payment of about 10%, while you receive near 100% cash at closing.
This proven alternative to costly and complex ESOPs suits A/E/LS firms with revenues between $1 million and $8 million. It eliminates the risk and delays of seller financing while preserving your legacy through employee ownership.
Starting a disciplined 5 to 7 year succession planning roadmap aligns leadership development, financial transparency, and bank engagement to maximize your firm’s sale proceeds and ensure a smooth transition.
With SBA financing and the Step-Up Legacy Plan™, your employees become owners while you walk away with full payment at closing.
Exiting your architecture, engineering, or land surveying firm requires a strategic, multi-year approach tailored to preserve your legacy and maximize financial security. The Step-Up Legacy Plan™, coupled with SBA 7(a) loans and other SBA loans for business purchase options, delivers a practical pathway allowing employee buyers to close deals with about 10% down payment and lenders financing the balance — enabling you to receive nearly 100% cash upfront without carrying seller notes or personal guarantees.
Years 1-2: Leadership and Financial Cleanup
Identify and groom senior employees equipped to transition into ownership roles. Concurrently, ensure rigorous financial transparency by documenting project backlog, work-in-progress (WIP), client contracts, and retainer agreements. These elements enhance lender confidence and drive favorable valuation multiples, which currently average around 4.2x EBITDA for many A/E/LS firms.
Years 2-3: Strengthen Client Contracts and Mitigate Risk
Formalize enforceable client contracts and retention guarantees to reduce perceived lender risk. SBA lenders prioritize stable, contract-backed recurring revenue, which bolsters financing eligibility and valuation benchmarks for your employee buyer group.
Years 4-6: Early Bank Engagement and Financing Design
Proactively collaborate with SBA-approved lenders experienced in A/E/LS acquisitions. SBA 7(a) loans now typically offer up to 90% financing with roughly 10% equity from buyers. Interest rates for 2025 range between 10.25% and 13.75%, with reduced guarantee fees and amortization terms extending up to 25 years, ensuring manageable buyer payments.
Diligent preparation aligned with SBA underwriting — including leadership grooming, financial clarity, and contract risk mitigation — significantly increases financing success, enabling a smoother ownership transfer.
Step 7: Closing and Transition Execution
Coordinate SBA loan approval, finalize deal terms, and implement onboarding protocols to ensure seamless client retention and employee leadership succession. This phase secures your legacy and protects business value.
Structured SBA financing with the Step-Up Legacy Plan™ protects your legacy and delivers immediate cash while empowering your trusted employees as new owners.
Successfully executing an SBA-financed employee buyout requires rigorous planning and dedicated professional guidance. Here are practical steps to implement the 5 to 7 year plan:
By following this disciplined roadmap, you safeguard your firm’s culture, maximize your financial proceeds, and set your employees up for success. This is the modern succession solution specifically tailored to A/E/LS firms with revenues between $1 million and $8 million.
Early action is critical — waiting risks client erosion, staff turnover, and reduced valuation multiples that make buyouts harder to finance. A well-executed Step-Up Legacy Plan™ with SBA financing creates a win-win scenario for owners and employees alike.
Contact Allen Business Advisors today to explore how this proven succession framework can deliver full seller cash at closing while preserving your firm’s unique legacy for generations.
Your A/E/LS firm’s future and your financial security deserve a well-structured plan that preserves legacy and delivers nearly full payment at closing. The Step-Up Legacy Plan™, combined with current SBA 7(a) loan programs, offers a low-risk, cost-effective route to employee ownership.
Starting your 5 to 7 year succession roadmap today maximizes your firm’s value, aligns leadership, and unlocks bank financing for trusted employees. Reach out to Allen Business Advisors to learn how this proven framework can secure your firm’s future and retirement goals with confidence.
