"Your employees can own the firm you built—and you get paid 100% at closing."

Employee buyouts are often dismissed because buyers lack capital or lenders aren’t engaged early. The Step-Up Legacy Plan™ flips that script: we structure deals so SBA-approved banks underwrite the transaction, validating valuation, cash flow, and buyer capacity before closing.

Consider the core benefits: the seller receives full payment at closing, employees gain continuity and ownership, and clients, culture, and community remain intact. This model—what we call “Buying Out the Boss.”—typically requires internal buyers to provide 5–10% down, often supported by a seller standby note, with banks financing the remaining 90%.

As Codie Sanchez captured in Entrepreneur.com, the emotional stakes are real:

“More than 70% of small business owners have no formal exit strategy, even though 43% say preserving their company’s legacy matters more than maximizing the sale price.” — Codie Sanchez, Entrepreneur.com

That preference for legacy over price is why employee buyouts fit so naturally for A/E/LS firms: buyers know the work, the backlog, and the client relationships—reducing transition risk compared with third-party sales.

Bank underwriting is the critical safeguard. When lenders evaluate a transaction, they verify three essentials: the company’s cash flow, the valuation math (SDE or EBITDA), and the buyer’s operational ability. If the bank won’t fund it, it’s a sign the structure or assumptions need work—protecting both seller and buyer.

Why SBA matters: traditional PE or MBO routes often require 20–30% buyer equity and can disrupt firm culture. SBA 7(a) financing extends institutional-quality acquisition capital into the $1–10M revenue band—exactly where most A/E/LS firms sit—making internal succession practical and bankable.

Compare outcomes:

FeatureTraditional SaleStep-Up Legacy™ SaleBuyerUnknown third partyTrusted employee(s)Down Payment20–30%+5–10% (max)Owner Paid at ClosingOften partial✅ Full paymentBank FinancingRare✅ SBA 7(a)Culture PreservedOften lost✅ YesTransition SupportMinimal✅ Built-in

When banks underwrite, you get free, objective validation: the business is healthy, the valuation is reasonable, and the loan is repaid from company cash flow. That validation is often the difference between a deal that collapses and one that closes cleanly.

Buying an existing firm lets employees become acquisition entrepreneurs—leaders who step into ownership with systems, customers, and cash flow already in place. As Gallup notes, 62% of U.S. adults would prefer to be their own boss, and over half are willing to take financial risk to do so—perfect raw demand for internal succession.

Still, buyers list real concerns. The Contrarian Thinking SMB Report 2025 found the top fears are cash-flow constraints (34.7%), lack of access to capital (30.7%), and personal financial exposure (22.7%). The Step-Up Legacy™ Plan addresses each:

• Cash Flow Tested by Banks — Lenders verify historical performance and debt-service coverage ratios before funding.
• Low Capital Requirement — SBA loans commonly finance 90–95% of the purchase, enabling qualified employees to buy with modest equity.
• Managed Personal Risk — Structure the deal so the business, not personal savings, repays the loan. As Forbes Advisor explains: “When you sign a personal guarantee, the goal is to structure the deal so the business — not your savings — covers the loan.”

The SMB Report also shows buyers' financial reserves: 31% have $100K–$250K, 24% have $250K or more, and 22% have $50K–$100K. With SBA down payments at 5–10%, many internal buyers can qualify for firms valued between $500K and $2.5M—the sweet spot for many A/E/LS practices.

Financial skills matter, but you’re not alone. The same report found buyers rate financial analysis (37%) and deal structuring (28%) as the hardest skills. That’s why each Step-Up Legacy™ engagement includes professional valuation, SBA-ready documentation, bank matchmaking, and deal terms that satisfy both seller and underwriter.

Finally, risk management is not risk avoidance. As Harvard Business Review writes: “The most successful buyers don’t eliminate risk — they manage it through deep due diligence and disciplined transitions.” Our process embeds that discipline so owners preserve legacy while unlocking retirement liquidity.