Your key employees know your firm's values, clients, and projects intimately. With updated 2025 SBA financing and the Step-Up Legacy Plan™, they can become owners while you receive near 100% cash at closing, preserving your legacy and securing retirement.
This proven, bank-friendly succession strategy provides a practical alternative to costly ESOPs, eliminating the need for seller financing and personal guarantees. By starting a disciplined 5 to 7 year roadmap today, you build essential value drivers like leadership depth, transparent financials, and strong client contracts that position your firm for maximum value.
Amid rising interest rates, tighter SBA underwriting, and an evolving market, this plan ensures a smooth ownership transition that rewards your trusted employees and protects what you’ve built.
Start now: a 5-7 year plan delivers full cash, preserves legacy, and empowers your trusted employees as owners.
Successfully transitioning your architecture, engineering, or surveying firm requires a thoughtful, multi-year approach aligned with current market and financing realities. The Step-Up Legacy Plan™ leverages SBA 7(a) loans—now available with manageable down payments and long amortization terms—to empower your employees as buyers while you receive near 100% payment at closing.
Here’s a practical 5 to 7 year roadmap to architect your succession:
Year 1-2: Leadership Development & Financial Hygiene
Identify and mentor your key technical and business leaders who can grow into ownership roles. Simultaneously, thoroughly document your firm's project backlog, work-in-progress (WIP), client contracts, and recurring revenue streams. Transparent, detailed financials not only build SBA lender confidence but also enhance valuation multiples, which for 2025 range broadly from approximately 4x to 7x EBITDA depending on your niche and geography.
Year 2-3: Client Contract Formalization & Risk Mitigation
Formalize client retention agreements, guarantees, and enforceable contracts to reduce lender risk perception. These contract-backed revenue streams are critical to qualifying buyers for SBA 7(a) loans and improving the bankability of the transaction. Robust client contracts and retention agreements also support stronger valuation metrics, directly impacting your final sale proceeds.
Year 4-6: Early Bank Engagement & Financing Strategy Design
Engage SBA-approved lenders familiar with A/E/LS employee buyouts to pre-qualify your buyers and co-design financing. SBA loans now typically offer up to 90% financing with 5–10% down payments. Although 2025 interest rates for SBA 7(a) loans range roughly from 10.25% to 13.75%, favorable guarantee fee reductions, long amortizations up to 25 years, and lender familiarity make these financing options manageable for both employees and sellers.
Compared to an ESOP, which often requires over $150,000 in setup fees plus ongoing trustee costs, the Step-Up Legacy Plan™ is a cost-effective, practical solution designed specifically for firms with revenues between $1 million and $8 million.
Successful cases illustrate that disciplined adherence to this roadmap results in strong SBA financing support, minimized deal risk, and high seller satisfaction with immediate cash proceeds.
The Step-Up Legacy Plan™ transforms your firm’s value drivers into near-full cash at closing while preserving culture and empowering employees.
Implementing this plan requires early and proactive preparation. Here are additional actionable steps to enhance your transition success:
By adhering rigorously to this 5 to 7 year plan, you establish a bankable, legacy-preserving owner transition that delivers full or near-full cash at closing.
Combined with Allen Business Advisors’ specialized expertise in A/E/LS succession and SBA loan navigation, you ensure your firm’s culture endures and your retirement is financially secure.
Your A/E/LS firm’s future is invaluable, and your legacy deserves protection through a well-structured succession plan. The Step-Up Legacy Plan™ empowers you to exit on your terms, receive cash at closing, and enable your employees to lead.
Start your 5 to 7 year planning roadmap today—build leadership, enhance financial clarity, and engage trusted SBA lenders experienced in A/E/LS financing. Reach out to Allen Business Advisors to explore how this proven strategy can maximize your payout, protect your culture, and secure your retirement.
Your succession journey begins now—ensure your firm’s value and legacy endure.
