Your employees can own the firm you built—and you walk away with full payment at closing.

Too many owners delay succession planning. Across the country the numbers are sobering: there are 12 million businesses in the U.S., and 41% (almost 5 million) are owned by baby boomers. Many of those owners find selling harder than expected—only about 20% of listed businesses actually sell, and roughly 15% transfer to family. Those trends imply that more than 3.5 million businesses could close in coming years, creating disruption for employees, clients, and communities.

At the same time, the Contrarian Thinking SMB Report 2025 and sector research show a clear preference among owners for legacy over price: 43% of owners say preserving their company’s legacy is more important than maximizing sale proceeds. Yet the perpetual gap is simple: more than 70% of small business owners have no formal succession plan.

Codie Sanchez called this wave of retirements “The Macro Problem.” We agree about the scale—but where she called it a problem, we see a once-in-a-generation opportunity to convert loyal employees into owners using bankable financing.

Because the answer isn't on Wall Street. It’s already on your payroll. Your long-tenured project leads, senior engineers, and client-facing principals know your systems, clients, and standards. When they buy the firm, transition risk drops materially—exactly the dynamic SBA lenders look for when underwriting acquisition loans.

How bankable employee buyouts work: SBA 7(a) acquisition financing lets buyers put down as little as 5–10%. Often the structure is 5% buyer equity, 5% seller standby note, and ~90% SBA financing. If buyers provide 10% down, the seller is paid in full at closing. If buyers can only provide 5% and the seller offers a 5% standby note, the seller still receives 95% at closing. For example, in one case an engineering firm in New Jersey had two banks decline financing until we restructured the package for SBA 7(a) underwriting: 5% buyer equity, 5% seller standby note, and 90% SBA financing. The seller received 95% of sale proceeds at closing, employees became owners, and client service continued without disruption.

Engaging a lender early is the keystone. SBA-approved banks prepare formal credit analyses—often 20–40 pages—examining cash flow, backlog, customer concentration, and receivables turnover. That documentation turns subjective promises into objective evidence and is the primary reason SBA-backed employee buyouts close successfully.

Real buyer concerns also matter. The Contrarian Thinking SMB Report 2025 found that 87% of aspiring buyers are comfortable with some level of risk, but roughly 34% cite cash-flow constraints as their top fear. SBA 7(a) financing directly addresses that capital gap while validating the deal through bank underwriting.

Below is a simple comparison of risk outcomes with and without SBA financing:

The Step-Up Legacy Plan™ is our practical answer: a streamlined ESOP alternative tailored for firms up to roughly $10 million in revenue. Rather than selling to a retirement trust, owners sell directly to trusted employees and use SBA 7(a) financing to fund the acquisition—so sellers receive 95–100% of proceeds at closing while employees take on bank-amortized debt instead of risky seller notes.

Compared with ESOPs—usually best for larger companies with at least $1.5M in EBITDA, six-figure setup fees (often starting around $150,000), and ongoing compliance costs—the Step-Up Legacy Plan™ eliminates complex trust structures, repeated valuations, and long-term seller carrybacks. It’s faster, simpler, and bank-friendly.

Core benefits include:

• Immediate Seller Liquidity — receive near-full payment at closing and avoid the parent-loan trap.
• Legacy Preservation — employees who already know your culture and clients take ownership, protecting relationships and institutional knowledge.
• Bankable Structure — SBA underwriting validates cash flow, backlog, and buyer capacity so the deal is objectively supportable.

We also see a broader market shift: as Codie Sanchez notes, the rise of the acquisition entrepreneur favors buyers who skip startup risk and buy proven firms. Internal buyers are the most natural acquisition entrepreneurs—reducing execution risk and increasing the odds of long-term success for the firm and its community.

If your firm is between $1M and $10M in revenue, the Step-Up Legacy Plan™ paired with early lender engagement and disciplined financial documentation creates a realistic, legacy-focused path to retirement liquidity and continuity.