Your key employees already deeply understand your firm’s culture, clients, and project workflows. With 2025 SBA lending updates and the streamlined Step-Up Legacy Plan™, they can become owners while you receive 100% cash at closing, securing your retirement and safeguarding your legacy.
This plan offers a practical alternative to costly ESOPs by eliminating seller financing risk and reducing complexity. By adapting to higher SBA interest rates and evolving underwriting standards, the Step-Up Legacy Plan™ remains a reliable pathway for architecture, engineering, and land surveying firms with $1M to $8M in revenue.
Through disciplined 5 to 7 year succession planning, firm owners can empower employees to take true ownership, preserve business culture, and achieve strong, upfront liquidity in today’s changing financing environment.
Your employees can own the firm you built—and you receive full cash payment at closing with the updated Step-Up Legacy Plan™.
Succession planning for A/E/LS firms in 2025 demands a carefully structured, multi-year approach that aligns with current SBA loan conditions and shifting market dynamics. The Step-Up Legacy Plan™ integrates recent SBA 7(a) lending updates, rising interest rates, and underwriting trends to facilitate employee buyouts that pay sellers near 100% upfront.
Step 1: Leadership Development and Financial Clarity (Years 1–2)
Begin by identifying and mentoring key senior employees who understand the nuances of your project-based revenue, client relationships, and culture. Simultaneously, rigorously clean your financial records—detailing work-in-progress, backlog, contracts, and retainers. Transparent and verifiable financials significantly improve lender confidence and valuation multiples, which for A/E firms currently average near 5x EBITDA.
Step 2: Strengthen Client Contracts & Risk Mitigation (Years 2–3)
Formalize client retention agreements and guarantees to reduce perceived risks. SBA lenders today prioritize stable recurring revenue with contractual backing, which aids in securing favorable loan terms under updated 2025 rules. This step enhances employee buyers’ bankability and firm valuation, supporting the Step-Up Legacy Plan’s seller-paid-at-closing structure.
Step 3: Early Bank Engagement & Financing Design (Years 4–6)
Initiate conversations with SBA-approved lenders familiar with A/E/LS sector dynamics. While interest rates for SBA 7(a) loans have risen to roughly 12.5%–15.5%, SBA guarantee fees have been slightly reduced, preserving loan accessibility. Employees typically qualify for 90% financing with about 10% down, enabling sellers to receive almost full payment upfront without personal guarantees or seller notes.
The Step-Up Legacy Plan™ is a pragmatic alternative that balances seller liquidity, buyer financing feasibility, and legacy preservation, making it the standout choice for smaller A/E/LS firms navigating 2025’s financing landscape.
With SBA financing enabling nearly 100% cash at closing, employee buyouts become a legacy-preserving, risk-mitigated opportunity for A/E firms.
The path to a successful employee buyout under the Step-Up Legacy Plan™ is disciplined and requires early action. Firm owners should start by assessing leadership readiness and financial cleanliness now to maximize bank financing opportunities later.
Consider these practical steps:
By integrating these approaches, the updated Step-Up Legacy Plan™ reduces common succession pitfalls such as delayed payments, seller exposure to financing risk, and post-sale leadership gaps. Instead, it secures your retirement funds up front, empowers your trusted employees, and protects decades of firm culture and client trust.
Taking a proactive 5 to 7 year succession planning horizon reflects lessons learned from pandemic disruptions and the increasing role of remote work. A focus on continuous talent development and financing preparedness differentiates firms that successfully transition ownership from those facing uncertainty or forced external sales.
With SBA loan volumes at historic levels and small loans under $500,000 increasingly available, this financing climate positions many A/E/LS firms perfectly for executing such legacy-preserving employee buyouts in 2025 and beyond.
Your A/E/LS firm’s legacy and your retirement security deserve action backed by expertise. The 2025 Step-Up Legacy Plan™ updates leverage current SBA financing trends and seller-paid-at-closing deal structures designed specifically for your industry.
By starting your disciplined 5 to 7 year succession roadmap today—focusing on leadership development, financial transparency, and early bank engagement—you create a path for trusted employees to own your firm and for you to receive full payment upfront.
Connect with Allen Business Advisors to explore how this proven framework can protect your firm’s culture, maximize value, and secure your financial future on your terms.
