Your trusted employees have the skills and knowledge to continue your firm’s legacy, but structuring a successful ownership transition in today’s complex financing environment requires experienced guidance.
With SBA 7(a) loan rates around 7.25% in 2025 and evolving ESOP regulations, having seasoned advisors ensures you design a buyout that maximizes seller payout at closing while preserving your firm’s culture.
The Step-Up Legacy Plan™ is a proven, bank-friendly alternative to costly ESOPs and seller financing. Navigating the intricacies of SBA financing, valuation, and deal structuring demands advisors who deeply understand the unique challenges faced by architecture, engineering, and land surveying firms today.
With experienced advisors, your employees can own the firm you built while you walk away with nearly 100% cash at closing.
Succession in A/E/LS firms involves far more than a simple sale. It demands navigating updated SBA loan rules, rising interest rates, and sophisticated deal terms that align owner liquidity with employee buyout feasibility.
Step 1: Expert Financial & Valuation Guidance
Advisors help owners develop transparent financial documentation, including backlog, work-in-progress, and retainer agreements that directly impact lender confidence and valuation multiples. In 2024-2025, SBA lenders expect clear client contracts and predictable revenue streams to approve financing without requiring onerous seller notes or personal guarantees.
Step 2: Navigating SBA Loan Structure & Underwriting
Current SBA 7(a) loans offer up to $5 million in financing with interest rates around 7.25% and require roughly 10% down. Experienced advisors coordinate with SBA-approved lenders familiar with project-based firms to maximize buyer qualification and ensure deal terms deliver seller cash at closing.
Step 3: Designing ESOP Alternatives Like the Step-Up Legacy Plan™
Compared to ESOPs with setup costs exceeding $150,000 and ongoing administrative burdens, the Step-Up Legacy Plan™ offers a streamlined alternative tailored for firms with $1M-$8M revenue. Advisors guide owners through the nuances of this plan, balancing legacy preservation with immediate liquidity.
The combination of proven SBA financing, tailored ESOP alternatives, and professional transition planning creates a robust framework for legacy-friendly success in a challenging market.
Without expert advisors, owners risk misjudging market conditions, overestimating buyer readiness, or accepting terms that dilute their retirement proceeds and jeopardize firm continuity.
Experienced advisors are the bridge between complex SBA rules and simple, bankable employee buyouts that protect your legacy and maximize liquidity.
Implementing a bankable employee buyout requires a clear 5 to 7 year roadmap, much of which an experienced advisor drafts with you and your leadership team:
Advisors also provide emotional and confidentiality support, managing expectations and smoothing complex negotiations. Their expertise translates technical SBA terms into actionable, tailored steps ensuring you get paid fully upfront and your employees own a viable, sustainable firm.
In a post-pandemic market marked by rising interest rates and greater regulatory scrutiny, this guidance is essential to avoid costly pitfalls. SBA loan approval rates remain favorable for well-prepared firms, but only with expert help uncovering lender preferences and negotiating favorable terms.
Engaging an advisor early expands your buyer pool, improves deal certainty, and strengthens legacy outcomes — all while minimizing surprises and seller exposure.
A/E/LS firm succession is a complex journey that demands seasoned advisory expertise.
By partnering with advisors who understand SBA financing trends, ESOP alternatives like the Step-Up Legacy Plan™, and deal structuring nuances, you empower your employees to become owners while receiving near 100% cash at closing.
Start your 5 to 7 year succession roadmap with Allen Business Advisors today to protect your legacy, maximize your financial return, and ensure your firm’s future.
