Your key employees already know your firm’s culture, clients, and workflows intimately. With the right structure and current SBA 7(a) financing options, they can become owners while you receive near 100% cash at closing, preserving your legacy and retirement security.
The Step-Up Legacy Plan™ offers a streamlined, cost-effective alternative to costly ESOPs and risky seller financing, tailored for A/E/LS firms with $1M to $8M in revenue. This practical plan leverages updated SBA loan programs and evolving underwriting standards to simplify employee buyouts in 2025.
By following a disciplined 5–7 year preparation roadmap, you can groom leadership, clarify financials, and engage banks early to maximize your firm’s value and ensure a smooth, legacy-preserving transition.
Your employees can own the firm you built—and you get paid 100% cash at closing.
Succession planning for architecture, engineering, and land surveying firms calls for a clear, multi-year strategy that aligns leadership development, financial transparency, and bank engagement. Early, disciplined preparation unlocks strong valuation multiples and maximizes deal certainty.
Years 1-2: Leadership & Financial Foundation
Start by identifying and mentoring your senior key employees who have the skills to lead and own the firm. Simultaneously, rigorously document financials—including backlog, work-in-progress (WIP), client contracts, and retainer agreements—to build lender confidence and enhance firm valuation.
Years 2-3: Formalize Contracts & Mitigate Risk
Develop enforceable client retention contracts and guarantees that stabilize recurring revenue streams and reduce lender-perceived risk. These steps improve employee buyers’ bankability and strengthen valuation multiples, critical under updated 2025 SBA underwriting standards.
Years 4-6: Early Bank Engagement & Deal Structuring
Collaborate with SBA-approved lenders experienced with A/E/LS firms to pre-qualify buyers and design financing. SBA 7(a) loans often finance up to 90% of the purchase with about 10% down. The Step-Up Legacy Plan™ leverages this financing to enable sellers to receive near 100% cash at closing, eliminating seller notes and personal guarantees.
Despite rising SBA interest rates (typically 10.25% to 13.75% in 2025) and tightened borrower requirements, this approach remains bankable due to early preparation and strong leadership grooming.
With valuation multiples typically ranging from 4x to 7x EBITDA depending on firm size and niche, disciplined succession planning can yield significant financial and legacy benefits.
Disciplined 5 to 7 year planning unlocks SBA financing that delivers full seller payout and preserves your firm’s culture.
Practical implementation of the Step-Up Legacy Plan™ requires early engagement with SBA lenders who understand project-based revenue and the unique risks of A/E/LS firms. Grooming internal buyers over several years improves their financial discipline and underwriting readiness.
Other critical steps include:
By following these steps, A/E/LS firm owners avoid the 'parent loan' trap of seller financing and costly ESOP fees while receiving near 100% cash at closing. This structured approach supports business continuity, client retention, and a legacy-protecting exit aligned with 2025 market realities.
Owners who have successfully implemented this model cite seamless transitions, financial peace of mind, and confident retirements as key outcomes.
Your A/E/LS firm’s future is invaluable, and your legacy deserves protection through deliberate, multi-year succession planning. The Step-Up Legacy Plan™ provides a practical, SBA-backed approach to receive near 100% cash at closing while empowering your employees to lead.
Starting your 5 to 7 year planning today maximizes your firm’s sale value, smooths deal execution, and preserves client relationships and firm culture. Allen Business Advisors offers the expertise to guide you through this evolving financing landscape.
Secure your legacy and retirement today—reach out to explore how this proven strategy fits your unique firm and goals.
