Your key employees already know your firm's culture, clients, and projects intimately. Thanks to updated SBA 7(a) loan programs and streamlined succession strategies, they can become owners while you receive near 100% cash at closing, securing your retirement and protecting your legacy.
The Step-Up Legacy Plan™ offers a simpler, SBA-friendly alternative to costly ESOPs, designed specifically for A/E/LS firms with $1M to $8M revenue. It eliminates seller financing risks and reduces deal complexity, adapting well to current financing climates and rising interest rates.
This article provides an updated roadmap for 2025 that balances legacy protection, bankable employee buyouts, and secure seller payouts—empowering you to plan your exit with confidence.
Your employees can buy your firm with SBA financing while you walk away with 100% cash upfront and legacy intact.
For A/E/LS firm owners contemplating succession in 2025, ESOPs have long been touted, but their high setup costs, regulatory complexity, and ongoing trustee expenses often make them impractical for firms under $8 million in revenue.
Fortunately, several SBA-friendly alternatives have emerged that simplify employee ownership while maximizing cash at closing and preserving firm culture.
Key alternatives include:
Among these, the Step-Up Legacy Plan™ stands out for A/E firms seeking a practical, cost-effective, and SBA-compatible route that aligns perfectly with the sector’s project-driven revenue and cultural priorities.
While SBA interest rates for 7(a) loans have increased in 2025, ranging from roughly 10.25% to 13.75%, the availability of loans up to $5 million with low down payments and reduced guarantee fees keeps employee buyouts viable and attractive.
Advantages of SBA-backed buyouts:
Bank lenders show rising familiarity with A/E/LS buyouts and expect thorough financial transparency, documented project backlog and retainer agreements, and formalized client guarantees to reduce risk.
With disciplined planning, SBA loans unlock employee ownership and legacy protection while providing near full payment to sellers at closing.
Implementing the Step-Up Legacy Plan™ successfully requires a disciplined 5 to 7 year succession roadmap centered on leadership development, financial clarity, and early bank engagement.
Critical steps include:
Additionally, hybrid deal structures combining small seller earnouts or minority equity retention help smooth transitions without exposing sellers to extended credit risk.
Compared to traditional ESOPs, which have high legal, setup, and ongoing trustee fees averaging over $150,000 upfront and $20,000+ annually, these alternatives offer significant cost savings and faster execution.
In today’s market, with increased private equity interest and consolidation pressures in A/E/LS sectors, an internal employee buyout with SBA financing preserves your firm’s independence, culture, and client relationships.
Owners who start early with detailed leadership development, financial hygiene, and bank prequalification maximize their chances of a smooth, legacy-preserving exit with full or near full seller payout.
Your A/E/LS firm’s future and your retirement security deserve a well-designed, bankable succession plan. The 2025 Step-Up Legacy Plan™ provides a proven, SBA-friendly path to receive near 100% cash at closing while empowering employees to take ownership.
Starting your 5 to 7 year transition now through disciplined leadership grooming, financial clarity, and trusted lender partnerships positions your firm for a smooth, legacy-preserving sale.
Contact Allen Business Advisors to explore how this practical, cost-effective alternative to ESOPs can protect your legacy and secure your retirement on your terms.
