Your key employees already know your firm’s culture, clients, and project workflows intimately. Thanks to recent SBA lending updates and alternative succession plans like the Step-Up Legacy Plan™, they can become owners while you receive full cash at closing, securing your retirement and preserving your legacy.
In 2025, SBA 7(a) loan programs enable employee buyouts with as little as 10% down, removing the need for seller financing or personal guarantees. For architecture, engineering, and land surveying firms with $1M to $8M in revenue, this offers a practical, cost-effective alternative to traditional ESOPs.
This article outlines a strategic 5 to 7 year roadmap to structure a bankable employee buyout deal that maximizes value, mitigates risk, and supports long-term business continuity.
With SBA-backed financing and thoughtful planning, your employees can become owners while you walk away with 100% cash at closing.
Succession planning for architecture, engineering, and land surveying firms in today's market demands a clear, multi-year strategy that aligns with updated SBA lending environments and evolving firm valuations. With average EBITDA multiples for A/E firms ranging between 13x and 15x in 2024 and strong SBA financing appetite, owners have powerful tools to enable employee buyouts that pay out fully at closing.
Step 1: Leadership Development & Financial Hygiene (Years 1–2)
Begin by identifying and mentoring your senior technical and business leaders who can gradually take on ownership roles. At the same time, clean and document your financials rigorously, capturing details like project backlog, work-in-progress (WIP), client contracts, and retainer agreements. Transparent and detailed financials increase lender confidence and enhance valuation multiples.
Step 2: Formalize Client Contracts & Mitigate Lender Risk (Years 2–3)
Secure client retention by formalizing contracts and guarantees. This reduces perceived risk from SBA lenders and strengthens the buyout's bankability. Lenders look closely at stable, recurring revenue and contract structures when assessing loans, particularly SBA 7(a) financing.
Step 3: Early Bank Engagement & Financing Structure Design (Years 4–6)
Engage SBA-approved lenders experienced with A/E/LS firms early to pre-qualify your employees as buyers. SBA 7(a) loans allow buyers to finance up to 90% of the purchase price with generally a 10% down payment. The Step-Up Legacy Plan™ leverages these loans to provide sellers with near 100% cash at closing, eliminating seller carrybacks or personal guarantees.
This financing model is a compelling ESOP alternative with much lower setup costs and complexity. It ensures legacy preservation by enabling your trusted employees, who deeply understand your firm’s culture and client base, to become full owners.
Other key benefits include:
This approach aligns well with current SBA loan trends, where partial ownership buyouts and seller retention of minority equity are increasingly accepted to facilitate smooth transitions.
Early transparency and bank engagement turn your succession plan into a bankable deal that funds full payment at closing.
Implementing this succession roadmap requires discipline and realistic timing. The recommended 5 to 7 year horizon balances firm growth, employee development, and lender readiness.
Here is a practical timeline:
Post-COVID workforce shifts have emphasized the importance of retaining key employees and maintaining strong organizational structures to support a smooth transition. Employee turnover pressures mean succession planning must also focus on developing bench strength and reducing dependency on sole leaders.
Owners who engage early with experienced advisors and SBA lenders also gain advantages negotiating loan terms and closing costs. SBA 7(a) loans now feature reduced guarantee fees and broader acceptance of partial equity buyouts, enabling creative deal structures tailored specifically for A/E/LS firms.
With this roadmap, you can preserve your firm’s legacy while unlocking financial security through a reliable, bank-financed employee buyout. Our experience working with dozens of A/E/LS firms shows that the Step-Up Legacy Plan™ combined with SBA financing is a practical, proven strategy for achieving both legacy goals and full seller proceeds.
Your A/E/LS firm’s succession deserves a plan that protects your legacy, maximizes value, and delivers full payment at closing. The strategic 5 to 7 year roadmap detailed here leverages SBA financing and the Step-Up Legacy Plan™ to make this possible.
By grooming leaders early, cleaning financials, formalizing client commitments, and engaging banks on the right timeline, you set the stage for a seamless employee buyout that supports long-term business continuity.
Contact Allen Business Advisors today to explore how this proven succession framework can secure your firm’s future and your financial goals.
