Your key employees already know your firm's culture, processes, and clients intimately. With a practical 5 to 7 year insider sale plan, you can stay in control while receiving near 100% cash at closing, preserving your legacy and securing your retirement.
Leveraging updated 2025 SBA 7(a) loan programs with down payments as low as 5-10%, the Step-Up Legacy Plan™ offers a streamlined alternative to costly ESOPs, removing seller financing risks and complexity.
This approach embraces evolving market dynamics, including rising interest rates, remote work trends affecting management readiness, and contemporary valuation multiples, enabling effective staged ownership transfer to trusted insiders.
Stay in control and get paid 100% cash at closing by empowering your trusted employees through a bankable 5-7 year insider sale plan.
Succession and ownership transition for architecture, engineering, and land surveying firms (A/E/LS) require a disciplined multi-year roadmap that integrates leadership development, financial clarity, contract formalization, and financing strategy aligned with 2025 market realities.
Step 1: Leadership Grooming and Financial Cleanup (Years 1-2)
Identify your senior technical and business leaders poised to take ownership roles. Focus on strengthening your financial documentation, including project backlog, work-in-progress (WIP), retainer agreements, and client contracts. Transparent, detailed financials build lender confidence and drive firm valuation multiples, which industry data shows range typically between 4x to 8x EBITDA or 0.5x to 1.5x revenue for 2025.
Step 2: Client Contract Formalization & Risk Mitigation (Years 2-3)
Solidify client retention through enforceable contracts, guarantees, and risk controls. These formal agreements reduce perceived deal risk in the eyes of SBA lenders and banks, supporting favorable financing terms. SBA 7(a) loan approval increasingly hinges on demonstrating stable recurring revenue backed by contracts, essential for employee buyers to qualify.
Step 3: Early Bank Engagement & Financing Design (Years 4-6)
Engage SBA-approved lenders experienced in A/E/LS firm acquisitions early to pre-qualify employee buyers. SBA 7(a) loans now typically offer up to 90% financing with down payments as modest as 5-10%, despite interest rates ranging from approximately 11% to 13% in 2025 due to the 7.25% prime rate environment. These longer amortization schedules (up to 25 years including real estate) support manageable payments for buyer teams.
This structured approach balances cash flow and business value growth as buyer payment sources with phased ownership transfers, allowing owners to retain control until fully paid.
In the current financing environment, attention to client contract strength, clean financials, and early lender coordination creates a bankable deal that secures seller liquidity and supports employee buyer success.
With disciplined planning and smart financing, your key employees become owners without you risking seller financing or personal guarantees.
This 5-7 year plan also includes key additional elements essential for success:
The Step-Up Legacy Plan™ remains a proven SBA-friendly alternative to ESOPs—tailored to smaller A/E/LS firms with $1M to $8M revenue. It streamlines complexity, delivers near 100% seller cash upfront, and preserves your firm's legacy and culture.
Contact Allen Business Advisors to develop a customized insider sale plan that fits your firm’s financials, leadership, and market conditions, ensuring you get paid fully while your trusted employees take ownership on a bankable path.
Your firm’s future and your retirement security depend on a well-structured, bankable insider sale plan that delivers near 100% cash at closing.
Start your disciplined 5 to 7 year succession roadmap today—focused on leadership development, financial transparency, client contract formalization, and early SBA lender engagement—to ensure a smooth ownership transition that preserves your legacy.
Connect with Allen Business Advisors now to explore how this proven strategy can safeguard your firm’s culture and secure your financial future on your terms.
