Sell to Your Employees Without Becoming Their Bank

Typically 3-6 months from start to closing.

Usually 5-10% of purchase price, often $100K-$500K depending on firm size.

Our banking relationships and expertise help present the strongest loan applications. We pre-qualify scenarios first.

Short Answer: Between 90% and 100% of your proceeds are paid at closing.Read More: Depending on the particular details of your transaction, you might carry a small seller note (usually 5–10%). This note is generally paid off within a few years, often through SBA refinancing once the new owners have successfully operated the business.

Short Answer: Most of the time, yes. Buyers typically access the money through a home equity loan. Additionally, there can be multiple buyers, which reduces the down payment for each individual. We also have other solutions to help the buyer(s) with the down payment. Remember, we are arranging SBA financing with 5 to 10% down. Our banking partners specialize in these transactions, so you get your money up front while your employees step into ownership

Short Answer: It’s simpler, faster, and less expensive.Read More: ESOPs are a specialized retirement plan that costs hundreds of thousands to set up and maintain, making them primarily viable for large firms. The Step-Up Legacy Plan™ enables employees to purchase using SBA financing, eliminating the complexity and ongoing costs associated with traditional financing. You still achieve continuity, culture preservation, and liquidity, without the headaches.

Short Answer: It’s the financial engine that makes employee buyouts possible.Read More: SBA loans allow employees to purchase a firm at fair market value with only 5–10% down. Banks provide the balance. Because we’re former commercial loan officers, we know how to structure deals so lenders say “yes".

Short Answer: They see continuity, not disruption.Read More: Selling to your employees means clients keep working with the people they already know and trust, and employees stay in a familiar culture. It’s one of the biggest reasons owners choose the Step-Up Legacy Plan™ over selling to an outside buyer.

Short Answer: Yes, the employees know their jobs. They need someone to teach them about your responsibilities in insurance, budgeting, and administrative tasks. We recommend that you plan to stay for a year after the sale. The number of hours you work decreases over time until you're only on call.

Short Answer: You may be surprised—it often works better than you think.Read More: The Step-Up Legacy Plan™ works best for firms with $1M–$8M in revenue and 10–50 employees. If you’re smaller, it may still be possible depending on your profitability, client base, and staff experience.

Short Answer: Typically takes 3–6 months from start to finish if you are selling to key employees. If you are selling to an outside third party it is normally 6 to 12 months.Read More: Timing depends on how quickly your financials are prepared, how ready your employees are to move forward, and lender processing. We manage the process to keep strong momentum.

Short Answer: No, that’s the whole point.Read More: Unlike traditional seller financing, the bank provides most of the capital. If you hold a seller note, it’s usually a small part, structured as standby equity until the SBA loan refinances it.

Short Answer: The value of your business is based on the amount of cash flow it generates for the owner, the size of your firm, and the type of work that you perform. A rule of thumb is 2-3x Seller's Discretionary Earnings (SDE) or 5- 6x EBITDA (Note: most people calculate SDE and EBITDA incorrectly). It is highly recommended that you have a professional value your business. 

SPECIAL NOTE: Banks will not accept the discounted cash flow method for valuing your business because this is based on projections. Banks always look at historical cash flow.