Seller Articles

What Happens After You Accept an Offer on Your Business?

By Troy Frank, Owner — Indiana Equity Brokers
Estimated read time: 7 min

The short answer: After a buyer’s offer is accepted, due diligence on a small business usually runs 30 to 60 days, and the full stretch from signed letter of intent to closing typically takes 60 to 90 days. If SBA financing is involved, plan on 60 to 120 days. During that window the buyer verifies your numbers, the lender re-underwrites the deal, the landlord assigns the lease, and attorneys paper the purchase agreement. Most deals that die after an accepted offer die here — not over price, but over something a buyer found that the seller never mentioned.

The champagne moment is the accepted offer. The hard part starts the next morning.

I’ve had sellers call me the day after signing a letter of intent asking when they get their money. The honest answer is usually two to three months. In between sits due diligence — the phase where a buyer stops believing what you told them and starts verifying it. If you want to understand what actually gets a deal to the closing table, you need to understand what happens in these weeks.

After 24 years and more than 880 closed transactions in Indiana, I can tell you the sellers who handle this phase well have one thing in common. They knew what was coming. Here is the week-by-week version.

Weeks 1–2: The Document Request Lands

Within days of an accepted offer, the buyer sends a request list. For a Main Street business it usually runs 40 to 80 line items. Three years of tax returns. Monthly P&Ls. Bank statements. Your accounts receivable aging. Customer lists. Equipment schedules. Employee census with wages. Every contract, lease, and license you hold.

Sellers are often stunned by the volume. Don’t be. A buyer putting their savings and a personal guarantee into your business is going to look at everything.

Here’s the part that matters: speed is a signal. When a seller returns a complete document package in ten days, the buyer relaxes. When documents trickle out over six weeks, the buyer starts wondering what’s being organized behind the scenes. In our experience, the deals that stall in week two rarely recover their momentum.

The fix is simple and it happens before you ever list. Assemble the package in advance. When the request arrives, you send a folder instead of starting a scavenger hunt.

Weeks 3–6: The Lender Re-Underwrites Everything

If your buyer is using an SBA 7(a) loan — and a large share of Main Street buyers in Indiana are — a second party now reviews your business. The bank does not take the buyer’s word for your numbers, and it does not take yours.

SBA acquisition loans typically run 60 to 120 days from LOI to funding. The lender orders a third-party business valuation. They confirm your tax returns match what you handed the buyer. They test whether the cash flow covers the new debt payment with room to spare.

This is where add-backs get tested. A seller can tell a buyer that the truck payment and the family cell phone plan are personal. A lender wants documentation. Add-backs you can prove survive. Add-backs you cannot prove get stripped out of the cash flow, which lowers what the bank will lend, which reopens the price conversation you thought you finished.

I’ve watched a deal lose $180,000 of value in a single underwriting call over add-backs nobody had documented. The business was fine. The paperwork wasn’t.

Weeks 5–8: Lease, Licenses, and Legal Documents

Three tracks run at once late in the process, and any one of them can set the calendar back.

The purchase agreement gets drafted, redlined, and negotiated. Attorneys argue over representations, warranties, indemnification caps, and what happens to accounts receivable at closing. Budget two to four weeks for this even when both sides are agreeable.

Licenses and permits transfer. In Indiana, a liquor permit, a contractor’s license, or a DOT authority each carries its own state timeline that no broker can accelerate.

And then there’s the landlord. If you lease your space, the buyer needs that lease assigned — and your landlord has leverage they didn’t have yesterday. Some use it. We’ve written before about how a landlord can delay or block a business sale, and it’s the item sellers underestimate most.

The Myth: Deals Die Over Price

Ask a room of business owners what kills a sale after an offer is accepted and most will say price. That’s the myth.

Here’s what I actually see. Deals die because a buyer finds something in week five that the seller knew in week one. A customer who left. A lawsuit. A key employee who already gave notice. Books that don’t reconcile to the tax return.

The problem isn’t usually the issue itself. Buyers price in known problems all the time. The problem is discovery. When a buyer finds something you didn’t disclose, they stop evaluating that item and start re-evaluating you. Once trust goes, the remaining issues stop being negotiable. That pattern is the same one behind most sales that fall apart after both sides agree.

So put the bad news on the table early. A seller who says “here’s our customer concentration, and here’s how we manage it” keeps the deal. A seller who lets the buyer’s accountant find it in week five usually doesn’t.

What Sellers Should Actually Do During These Weeks

Run your business. That sounds obvious. It isn’t what happens.

Sellers get consumed by the transaction and take their eye off operations. Then revenue softens in month two, the buyer sees a declining trend in the interim financials, and now there’s a legitimate reason to retrade the price. Your numbers stay under a microscope until the day you close.

Beyond that, three things: answer every request within 48 hours, route all buyer communication through your broker so nothing gets said twice or said wrong, and keep the sale confidential from employees and customers until closing is certain.

That last one matters more than sellers expect. Word gets out, a key employee starts job hunting, and suddenly the buyer is looking at a business with a hole in it.

Frequently Asked Questions

How long does due diligence take when selling a small business?
For most small, owner-operated businesses, due diligence runs 30 to 60 days from signed letter of intent. Clean books and fast seller responses keep it near 30. A disorganized document package can push it past 90 days.

What documents will a buyer ask for during due diligence?
Expect a request list of 40 to 80 items. The core set is three years of tax returns, monthly profit and loss statements, bank statements, accounts receivable aging, equipment lists, customer and vendor detail, employee wage data, and every contract, lease, license, and permit the business holds.

Can a buyer lower the price after due diligence starts?
Yes. A buyer can renegotiate — usually called a retrade — if diligence turns up something material, such as undocumented add-backs, declining revenue during the process, or an undisclosed liability. The most reliable defense is disclosing known issues before the offer is signed, so they’re already priced in.

How long does an SBA loan take when buying a business in Indiana?
Plan on 60 to 120 days from letter of intent to funding for an SBA 7(a) acquisition loan. The lender orders an independent business valuation and re-underwrites the seller’s financials, which adds time beyond a standard working capital loan.

What is the most common reason a business sale falls apart after an offer?
Undisclosed problems found during diligence — not price. When a buyer discovers something the seller never mentioned, trust breaks down and the rest of the deal stops being negotiable. Known problems get priced in. Discovered problems kill deals.

Should I keep running my business during due diligence?
Yes, and aggressively. Buyers and lenders review interim financials right up to closing. If performance slips while the deal is pending, you hand the buyer a reason to reduce the price or walk.

The Work That Makes This Phase Easy Happens Before You List

Due diligence is not a test you pass by being clever in the moment. It’s a test you pass with preparation you did months earlier — clean books, documented add-backs, known problems already on the table, and a document package sitting ready.

If selling is anywhere on your horizon, the most useful thing you can do this year is find out where you actually stand. Indiana Equity Brokers has closed more than $808M in transactions for Hoosier business owners, and we provide a free, no-obligation business valuation to every client. A confidential conversation costs nothing and there are no upfront fees.

Reach me directly at troy@indianaequitybrokers.com or visit indianaequitybrokers.com.

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What Helps a Business Sale Actually Reach the Closing Table?

By Troy Frank, Owner — Indiana Equity Brokers
Estimated read time: 6 min

The short answer: Roughly half of business sales that enter due diligence never make it to closing. The deals that do close share four traits: the buyer and seller align on all terms early — not just price — the seller’s financials hold up under scrutiny, both sides disclose problems before due diligence finds them, and each party walks away feeling like they won. In our experience at Indiana Equity Brokers, a well-prepared Main Street deal typically closes 60–90 days after an accepted offer.

An accepted offer feels like the finish line. It isn’t. I’ve watched sellers celebrate a signed letter of intent, then spend the next three months watching the deal wobble through due diligence, financing, and lease negotiations. Some of those deals close. Many don’t. Industry data suggests 70–80% of small business sales fail somewhere between listing and closing.

After 24 years and more than 880 closed transactions in Indiana, our team has a pretty clear picture of what separates deals that close from deals that collapse. It’s rarely luck. Here’s what actually moves a sale from accepted offer to signed closing documents.

Align on Everything — Not Just Price — Before Due Diligence Starts

Most sellers focus on one number: the purchase price. But price is maybe half of what a deal actually contains. The rest lives in the details: how much cash at closing, seller financing terms, what happens to inventory and working capital, how long you’ll stay on for training, and whether the landlord will assign the lease.

Deals stall when these items get left for “later.” Later is due diligence, and the weeks a buyer spends verifying your business are the worst time to discover the buyer expected you to stay for a year when you planned on 30 days.

The strongest deals we close at IEB nail down these terms in the offer itself. A one-page LOI that only states price is a weak foundation. A detailed offer that covers transition, working capital, and financing structure gives both sides confidence — and leaves fewer surprises to surface later. We covered why this matters in why business sales fall apart after both sides agree, and the pattern holds: deals rarely die over known terms. They die over terms nobody discussed.

Clean Books Get Deals Closed

Here’s the myth: buyers walk away over price. Here’s the reality we see on the ground: buyers walk away over surprises in the numbers.

According to Axial’s 2025 Dead Deal Report, diligence findings were the single largest deal killer, accounting for about 25% of failed transactions — things like undisclosed legal issues, customer concentration, and contract problems. Price disputes rank far lower.

What this means for an Indiana seller is simple. Before you list, your financials need to tell a story a buyer’s lender can verify. Tax returns that match your P&L. Add-backs you can document. A customer list that doesn’t show 60% of revenue coming from one account without an explanation. SBA lenders fund a large share of Main Street deals in Indiana, and they will re-underwrite every number you present. If the numbers hold, financing moves. If they don’t, the deal dies quietly in a bank committee meeting.

This is also why what your business is worth and what it will actually sell for depend on documentation, not just performance.

Disclose Problems Early — Transparency Keeps Deals Alive

No business is perfect. Every company we’ve ever sold had something: a customer concentration issue, an aging piece of equipment, a key employee nearing retirement.

Known problems get priced in. Discovered problems kill trust — and trust is the real currency between an accepted offer and closing. When a buyer finds an issue the seller never mentioned, they stop wondering about that issue. They start wondering what else you didn’t mention. That’s when deals unravel.

Our approach at Indiana Equity Brokers is to surface the warts before the buyer does. It feels counterintuitive. It works. A buyer who hears “here’s the challenge, and here’s how the business manages it” stays at the table. A buyer who finds it on their own in week six usually doesn’t.

Expect 60–90 Days From Accepted Offer to Closing

Even a clean deal takes time. Financing approval, legal documents, lease assignment, license transfers, and final walkthroughs each have their own clock. In our experience, most Indiana Main Street deals close 60–90 days after the offer is accepted. Larger or more complex deals can run longer.

Sellers who understand this stay calm when the buyer’s lender asks for one more document. Sellers who expect a two-week close get frustrated, and frustration leaks into negotiations. The goal isn’t to close fast. It’s to close once, correctly, with a deal structure that protects what you actually keep.

Both Sides Have to Win

The deals that close are the ones where the seller gets fair value for decades of work and the buyer believes they bought a real opportunity. When one side squeezes the other on every point, the losing side starts looking for exits — and between LOI and closing, there are plenty of exits.

A good broker’s job is to keep the deal balanced enough that neither side wants out. That’s not softness. That’s how you get to a closing table.

Frequently Asked Questions

What percentage of business sales actually close?
Roughly half of deals that enter due diligence fail to reach closing, and about one in three signed letters of intent never closes. Across all listed businesses, industry estimates put the overall failure rate at 70–80%. Preparation before listing is the biggest factor sellers control.

How long does it take to close a business sale after an offer is accepted?
For most Main Street businesses in Indiana, expect 60–90 days from accepted offer to closing. SBA financing, lease assignments, and license transfers drive the timeline. Complex deals or real estate can extend it.

What kills most business sales during due diligence?
Surprises in the numbers. Diligence findings — undisclosed legal issues, customer concentration, financials that don’t match tax returns — were the top cause of dead deals in Axial’s 2025 report, at about 25% of failed transactions. Price disputes kill far fewer deals than sellers expect.

How can I make sure my business sale closes?
Get your books lender-ready before listing, disclose known issues early, negotiate all terms (not just price) in the offer, and set a realistic 60–90 day timeline. Working with an experienced Indiana business broker helps you avoid the mistakes that surface during due diligence.

Do I need a business broker to close a sale in Indiana?
No law requires one, but the closing rate difference is significant. A broker screens buyers for financing ability, keeps the sale confidential, manages due diligence requests, and keeps both sides moving when the deal hits friction — which nearly every deal does.

Thinking About Selling? Start Before the Offer

A closing isn’t won at the closing table. It’s won months earlier — in the quality of your books, the clarity of your terms, and the honesty of your disclosures. If a sale is anywhere on your horizon, the best time to prepare is before a buyer ever appears.

If you want to know what your business might be worth and whether it’s ready for market, a confidential conversation costs nothing. Indiana Equity Brokers has closed more than $808M in transactions for Hoosier business owners, and we provide a free, no-obligation business valuation to every client. Reach me directly at troy@indianaequitybrokers.com or visit indianaequitybrokers.com.

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The Business Was Worth More Three Years Ago

By Troy Frank, Owner, Indiana Equity Brokers Estimated read time: 6 min

The short answer: The best time to sell a business is while it’s still growing, not after momentum fades. Owners who wait until a health scare or burnout forces the sale usually accept a lower price, because buyers discount stagnant, owner-dependent companies. A business that might earn 4 to 5 times EBITDA while growing can reprice closer to 3 times once revenue flattens. The smart move is to start planning two to four years before you think you’ll sell, so you still have time to improve value before going to market.

We have a version of the same conversation almost every month. An owner is finally ready to sell, and the business they bring to market is no longer the business buyers would have paid a premium for three years earlier. The company has been good to them, and they’ve built something real. But when we open the financials, the picture is softer than it used to be. Revenue has plateaued, a couple of key people have left, and reinvestment slowed down because they didn’t want to spend money on something they were about to hand off.

The business is still sellable. It would simply have been worth more, often a lot more, when it still had momentum. And by the time most owners feel that shift, the window to fix it has usually closed. This is one of the most expensive mistakes I see Indiana owners make, so let’s walk through why it happens and how to avoid it.

Most exits aren’t planned, they’re triggered

Owners like to believe they’ll pick the perfect moment to sell. In practice, most sales get set in motion by something that was never part of the plan. A health scare, a falling-out between partners, a lost key customer, a spouse who’s done waiting, or a surprise offer all force the timeline.

Retirement creates its own version of the trap. The business has thrown off strong income for years, so the owner keeps running it while their engagement quietly fades. They stop chasing new opportunities, skip the trade shows, delay a hire, and let the strategic plan sit in a drawer. None of that shows up on a tax return right away. It shows up in momentum, and sophisticated buyers and their lenders are very good at telling the difference between a business that’s still growing and one that’s being held together.

The numbers behind this are hard to ignore. Roughly half of US small-business owners are now 55 or older, yet fewer than a third have a formal succession or exit plan. About 41 percent of US businesses are boomer-owned, and an estimated $10 trillion in business value is expected to change hands by 2030 as those owners retire. A lot of those companies will hit the market at the same time, and the ones that planned ahead will stand out.

What waiting actually costs you

The decline rarely arrives in one bad year. It happens in layers. A sales hire gets delayed, a systems upgrade gets deferred, and a competitor starts winning work you’re no longer fighting for. Key employees feel the drift and start taking recruiter calls.

The biggest missed investment usually isn’t equipment or marketing. It’s management depth. Owners who wait too long often find they’re still holding too many of the important customer, supplier, and employee relationships themselves. That owner dependence is a risk a buyer can see, and they price it in.

By the time your trailing twelve-month numbers show the damage, buyers may already be trimming your multiple. In some sectors a business that could have drawn 4 to 5 times EBITDA during steady growth gets re-priced closer to 3 times once revenue stalls, customer concentration tightens, or the owner looks checked out. On a $5 million business, that gap is not a rounding error. It can be the difference between a clean exit and a stressful one.

There’s a quieter cost too. A declining trajectory shrinks your buyer pool. Private-equity buyers and other institutional acquirers generally aren’t hunting for turnaround projects in the lower-middle market. Fading momentum tends to leave you negotiating with a smaller group of buyers, which is exactly the wrong spot to be in when you’ve finally decided to sell.

Selling from strength isn’t the same as selling in a hurry

The advice I give owners is not “sell now.” It’s “start thinking seriously about this before you assume you have to.” Those are very different things.

A business that sells from strength commands a premium. Growing revenue, high customer retention, clean books, and a management team that doesn’t depend entirely on the owner all attract more buyers. More buyers create competitive tension, and that tension is what pushes price up and gets deals closed faster with fewer conditions. The owner holds the upper hand precisely because they don’t need to sell. They’re choosing to.

That advantage fades the moment the business shows cracks. Buyers can sense when an owner is tired, when reinvestment has slowed, and when the next chapter is overdue. Desperation is expensive, and buyers are happy to let you pay for it.

What early planning actually looks like

For most owners, “early” means two to four years before a likely sale. Not because the sale itself takes that long, though good preparation does take time, but because that’s the window when the decisions that shape value are still in front of you. Start a year or two out and you can still move the needle. Wait until the year you list and most of those levers are gone.

Early planning gives you a clear read on a handful of things that decide your price:

• What your business is actually worth in today’s market, not what you hope it’s worth
• Which value drivers matter most to the buyers likely to acquire a company like yours
• Where your financials, ownership structure, or operations might raise flags in due diligence
• How dependent the business still is on you personally
• Which investments could still lift value before you go to market
• How different deal structures would affect your taxes, risk, and net proceeds

None of this commits you to selling. It simply gives you a clearer picture of your options and enough runway to act on them deliberately instead of reactively. This is the heart of good exit planning, and it’s where owners who plan ahead consistently pull away from the ones who don’t.

Frequently Asked Questions

When is the best time to sell my business? The best time to sell is while the business is still growing, with steady revenue, clean books, and a team that can run without you. Selling from strength attracts more buyers and earns a higher multiple. Owners who wait until burnout, a health issue, or a lost customer forces the sale almost always accept a lower price.

How long before selling should I start planning? For most owners, two to four years before a likely sale. The sale itself doesn’t take that long, but the decisions that build value, such as diversifying customers and building a management team, take time to pay off. Starting early is the single most reliable way to sell for more.

Does waiting too long to sell lower the value of my business? Yes. As revenue flattens and the owner disengages, buyers discount the multiple to account for the added risk. A business that might have earned 4 to 5 times EBITDA while growing can reprice closer to 3 times once momentum fades. A declining trajectory also shrinks your buyer pool, which weakens your negotiating position.

Why do most business owners end up selling at the wrong time? Because most exits are triggered, not planned. A health scare, a partnership split, a lost key customer, or simple burnout sets the timeline instead of the owner. By the time those pressures appear, the business has often already lost the momentum that would have earned a premium.

Do I have to be ready to sell to talk to a broker? No. A good first conversation is about understanding where you stand, what your business might be worth, and what buyers would care about. It doesn’t commit you to anything. Knowing your numbers early is what gives you real options later.

The bottom line

The owners who get the most for their businesses are rarely the ones in a hurry. They’re the ones who looked at their options early, while the business still had momentum and while there was still time to fix what buyers care about. Waiting until circumstances decide for you is how good businesses sell for less than they should.

If selling is even a two-to-four-year question for you, understanding what your business may be worth and what you can still improve before going to market are the first steps. A confidential conversation costs nothing and commits you to nothing. Troy Frank and the team at Indiana Equity Brokers have closed more than 880 deals for Indiana business owners since 2004, with no upfront fees and a free valuation to start. You can reach Troy at troy@indianaequitybrokers.com

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What Makes a Business Worth More?

By Troy Frank, Owner, Indiana Equity Brokers

Estimated read time: 6 min

The short answer: A business is worth more when a buyer can see steady profits, low risk, and a company that runs without the owner. The biggest business value drivers are recurring revenue, a diversified customer base, a real management team, clean financials, and consistent growth. Two businesses with the same earnings can sell for very different prices because of these factors. Most Main Street businesses sell for roughly 2 to 3.5 times their seller’s discretionary earnings, and the strongest value drivers are what move you to the top of that range.

Two owners walk into my office in the same month with the same number on their tax return. Both made about $500,000 in adjusted earnings last year. One sells for $1.4 million, and the other sells for nearly $1.8 million. Same earnings, very different price. The gap comes down to business value drivers, which are the things a buyer studies to judge how risky and how durable your profits really are.

You can’t always put an exact dollar figure on each one. But you can look at your business honestly and see where you stand. Below is the scorecard buyers use, what each driver does to your price, and where Indiana owners tend to leave money on the table.

The value-driver scorecard

Here’s a simplified version of what a buyer or appraiser weighs when they size up your company. Look at each row and decide, honestly, whether you sit on the low, medium, or high end.

The list could go on, because almost anything that affects risk affects value. But don’t just compare yourself to businesses in general. Compare yourself to the specific buyers and competitors in your market, because that’s the bar your sale price gets measured against.

The two drivers that move price the most

If you only fix two things before you sell, fix these. In my experience they swing the final price more than any other factors on the scorecard.

Customer concentration

Buyers get nervous when too much of your revenue comes from too few customers. The rule of thumb most buyers and appraisers use is straightforward. If your single largest customer is under 10 percent of revenue, you’re in healthy territory. Between 10 and 20 percent, a buyer gets cautious. Once one customer crosses 20 percent, and especially north of 30 percent, you’re in a high-risk zone, and the multiple usually gets compressed below the industry median.

The logic is simple. If losing one phone call could cut your revenue by a third, the buyer is buying that risk along with the business. Long-term contracts and high switching costs soften the blow, but the safest path is to spread your revenue across more accounts before you go to market.

Owner dependence

This is the one Indiana owners underestimate most. If the business only works because you’re the one answering the phones, holding the customer relationships, and making every decision, then a buyer isn’t purchasing a company. They’re purchasing a job that depends on you, and you’re the one person leaving. Key-person dependence on the owner compresses the multiple below the median for exactly that reason.

The flip side is real money. A business with a capable second-in-command, documented processes, and customer relationships spread across the team is far less risky to buy. De-risking owner dependence is one of the few moves that can meaningfully raise your multiple, and in some cases it can come close to doubling it. The earlier you build that bench, the more it’s worth at closing.

How business value drivers turn into a number

Main Street businesses generally sell in a range of about 2 to 3.5 times seller’s discretionary earnings, and larger lower-middle-market companies trade on a multiple of EBITDA. Where you land inside that range is the whole game. Strong, diversified, well-documented businesses earn the high end. Owner-dependent businesses with shaky books and one giant customer earn the low end, if they sell at all.

That’s why two companies with identical earnings can sell hundreds of thousands of dollars apart. The earnings tell a buyer what the business made last year. The value drivers tell a buyer how confident they can be that the profits will still be there next year, without you. Confidence is what buyers pay a premium for.

This is also why the timing matters. Most of these drivers can be improved, but not overnight. Diversifying a customer base, building a management layer, and cleaning up financials are projects that take quarters or years, not weeks. Owners who start a year or two ahead consistently sell for more, which is the heart of good exit planning.

What you can do before you sell

Start by getting an honest read on where you actually stand, ideally from someone who sells businesses for a living rather than from your own optimism. At Indiana Equity Brokers we give every owner a free, confidential business valuation before they sign anything, so you know your range and your weak spots up front.

From there, the highest-payoff projects are usually the same. Reduce your reliance on any single customer. Build and document a team that can run the day-to-day without you. Get your books clean enough that a buyer’s accountant won’t find surprises. Each of those directly attacks the risk a buyer is pricing in, and lowering that risk is what moves you up the multiple.

Frequently Asked Questions

What are the main value drivers of a business? The main value drivers are recurring or repeat revenue, a diversified customer base, consistent and growing profits, a management team that can run the business without the owner, clean financial records, and a healthy industry trend. Buyers study these to judge how risky your profits are. The stronger they look, the higher the multiple a buyer will pay.

How much is my business worth? Most Main Street businesses sell for roughly 2 to 3.5 times their seller’s discretionary earnings, and larger companies sell on a multiple of EBITDA. Where you land in that range depends on your value drivers, so two businesses with the same earnings can sell for very different prices. A confidential valuation from a broker is the most reliable way to pin down your number.

Does customer concentration lower the value of my business? Yes. When one customer makes up more than 20 percent of your revenue, and especially more than 30 percent, buyers treat it as a real risk and usually pay a lower multiple. Under 10 percent from any single customer is considered healthy. Spreading revenue across more accounts before you sell is one of the most reliable ways to protect your price.

How does owner dependence affect business value? A business that only runs because of the owner is harder and riskier to sell, so it earns a lower multiple. Buyers want a company that keeps performing after the owner leaves. Building a capable management team and documenting your processes reduces that risk and can meaningfully raise your valuation, sometimes close to doubling the multiple.

How can I increase the value of my business before selling? Focus on the business value drivers that lower a buyer’s risk. Diversify your customer base, build a management team that can operate without you, clean up your financial records, and show steady growth. Most of these take a year or more to improve, so the owners who plan their exit early are the ones who sell for the most.

The bottom line

Your earnings tell a buyer what your business made. Your value drivers tell them how safe those earnings are going forward, and that’s what decides whether you sell at the top or the bottom of the range. The good news is that most of these drivers are within your control if you start early enough.

If you want an honest assessment of where your business stands and what it could be worth, a confidential conversation costs nothing. Troy Frank and the team at Indiana Equity Brokers have closed more than 880 deals for Indiana business owners, with no upfront fees and a free valuation to get started. You can reach Troy at troy@indianaequitybrokers.com

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Deal Structure When Selling a Business

By Troy Frank, Owner, Indiana Equity Brokers Estimated read time: 6 min

The short answer: Two offers at the same price can leave you with hundreds of thousands of dollars’ difference in real, after-tax cash. Deal structure decides what you keep, and it comes down to how much is cash at closing, how much is a seller note, and how much is rollover equity. Roughly 70 to 80 percent of small business sales involve some seller financing, and a typical seller note runs 10 to 20 percent of the price. The time to plan structure is before you go to market, not after the offers arrive.

A seller called me last year, thrilled, because he had two offers on his business and one of them was $400,000 higher than the other. He wanted to take the bigger number and move on. So we sat down and ran the actual math together. The smaller offer put more cash in his pocket at closing, and it freed him from five years of risk, so that’s the one he took.

This is the part of selling a business that almost nobody talks about. The headline price is not what you keep. What you keep depends on how the deal is structured, and the best time to think it through is before the offers ever land on your desk.

Same price, very different deals

Picture two offers on a business listed at $5 million.

Offer A comes in at the full $5 million. The buyer puts $3.25 million in cash at closing, signs a $1 million seller note paid over five years, and asks the seller to take the remaining $750,000 as rollover equity, meaning an ownership stake in the business under its new owner instead of cash.

Offer B comes in at $4.6 million, all cash at closing, with a buyer who’s already pre-approved for financing and can close in 60 days.

Offer A looks bigger, so it’s tempting to stop there. But look at what the seller is actually holding. That seller note makes them the buyer’s junior lender for five years, sitting behind the bank. If the business hits a rough patch, the bank will almost certainly force the note onto full standby, which means the seller’s payments stop until the bank is made whole. The rollover equity is a minority stake in a company the seller no longer controls, and there’s no guaranteed date or price for cashing it out.

None of that makes Offer A a bad deal. Seller notes get paid in full far more often than owners fear, and rollover equity is how some sellers earn a real second bite of the apple. If the new owners grow the business and sell it again in five or seven years, that retained stake can be worth more than the cash they gave up at closing. Spreading the payments across several years can also soften the tax hit.

The point is simply that you can’t compare two offers on price alone, and the smart time to work through all of this is before you go to market.

The five questions to answer before you list

Long before a buyer sees your financials, you and your advisor should be able to answer these.

How much cash do you need at closing, really?

Not what you’d like to walk away with, but what you genuinely need to retire debt, cover taxes, and fund whatever comes next. That number sets your floor, and it tells you how much flexibility you can afford to offer on terms. This is exactly the kind of planning that separates owners who plan their exit early and sell for more from those who scramble once offers start arriving.

Can the business carry acquisition debt?

Lenders and serious buyers all run the same math. They take your adjusted earnings, subtract a market salary for the new owner, then subtract the annual loan payments your asking price implies, and they see what’s left over. If that cushion is thin, your price isn’t financeable at conventional terms, no matter what the valuation report says. Either the structure has to bridge that gap, or the price has to come down.

Will you carry paper, and on what terms?

A seller note of 10 to 20 percent of the price is common, and it does real work. It bridges valuation gaps, it satisfies lenders who want the seller to keep skin in the game, and it signals confidence in the business. But the terms matter enormously, because the interest rate, the payment schedule, the security, and the standby provisions all change what that note is actually worth to you. That last piece got sharper in 2025, which I’ll come back to in a moment.

Would you keep equity after the sale?

Rollover equity isn’t right for everyone. It works best when you believe in the buyer’s growth plan and can afford to leave part of your money illiquid for several years. If what you want is a clean exit and a clean break, say so early, because it shapes which buyers your advisor should even bring to the table.

What does each structure do to your tax bill?

What’s being sold, how the price is allocated, and when you actually receive the payments can all swing your after-tax proceeds dramatically. This is worth a real conversation with your accountant before you set an asking price, because some of the most valuable tax planning has to be in place a year or more ahead of a sale.

What changed in 2025: the SBA rules tightened

Here’s an expert-level detail most sellers never hear about. In June 2025 the SBA rolled out new lending rules, known as SOP 50 10 8, and they reshaped how acquisition deals get financed.

Under the new rules, a seller note can cover only half of the buyer’s required equity injection. In practice that often caps the seller note at roughly 5 percent of the deal when it’s counted toward the buyer’s equity, and that portion typically sits on full standby for the first two years. For years sellers routinely carried anywhere from 10 percent to a third of the price, so this genuinely changed the math.

The result is real friction in the market. About 41 percent of business brokers say the 2025 SBA changes are causing delays in closing deals. If you’re planning to sell, this matters to you directly, because it affects how buyers finance the deal and how much paper you may be asked to carry. A broker who’s closing deals in this market knows where the new limits bite and how to structure around them.

Flexibility widens your buyer pool, and that’s where price comes from

Here’s the part most sellers underestimate. Structure doesn’t only affect what you keep from a single offer. It also affects how many offers you get in the first place.

A business offered strictly as all cash, full price, as-is is only available to the small slice of buyers who can write that check or finance the whole amount conventionally. Add reasonable seller financing or an openness to a rollover piece, and the qualified buyer pool grows. More qualified buyers competing for your business is the single most reliable way to push the price up.

The market data backs this up. Roughly 70 to 80 percent of small business sales involve some seller financing, yet a recent survey found that only 22.8 percent of sellers plan to offer it while 62.3 percent of buyers want it. That gap is your opening. Sellers who insist on total rigidity often end up taking a lower price from the one buyer who could meet their terms. Flexibility isn’t a concession you make, it’s a negotiating asset you use.

Where an M&A advisor fits in

Your accountant knows your tax position, and your attorney will protect you in the purchase agreement. But neither one spends their days watching what buyers in Central Indiana are actually offering, what lenders are actually approving, and which structures are actually closing this year.

That marketplace view is what a good broker brings, and it’s most valuable early, while you’re still deciding whether and how to go to market rather than after you’ve anchored yourself to a number that can’t be financed. It also helps to see what’s actually selling in your market right now.

At Indiana Equity Brokers we’ve closed more than 880 transactions over 23 years, and the pattern is consistent. The businesses that sell well are rarely the ones with the highest asking price. They’re the ones packaged so the price, the structure, and the financing all work together, for the seller’s bottom line and for the buyer’s ability to say yes.

Frequently Asked Questions

What is seller financing when selling a business? Seller financing is when the seller accepts part of the purchase price over time instead of all cash at closing, usually in the form of a promissory note. A typical seller note runs 10 to 20 percent of the price and is paid over three to five years with interest. It bridges valuation gaps and helps buyers qualify for bank financing, which is why roughly 70 to 80 percent of small business sales include some form of it.

Is a higher offer always the better deal when selling my business? No. Two offers with the same headline price can differ by hundreds of thousands of dollars in real, after-tax proceeds. A higher price loaded with a long seller note and illiquid rollover equity can put less cash in your pocket than a lower all-cash offer. The smart move is to compare offers on net proceeds and risk rather than on the headline number.

What is rollover equity in a business sale? Rollover equity is when a seller keeps an ownership stake in the business under its new owner instead of taking that portion in cash. It can deliver a second bite of the apple if the new owners grow the company and sell it again later. Because it’s a minority stake with no guaranteed cash-out date, it suits sellers who believe in the buyer’s plan and can afford to hold illiquid value for several years.

How did the 2025 SBA rules change seller financing? The SBA’s SOP 50 10 8, effective June 2025, limits a seller note to half of the buyer’s required equity injection, which often works out to about 5 percent of the deal when it counts toward equity, and that portion usually sits on full standby for two years. Previously sellers commonly carried anywhere from 10 percent to a third of the price. About 41 percent of brokers report that the changes are delaying closings.

How early should I plan deal structure before selling? Before you set an asking price. Your cash-at-closing needs, the financeability of the price, and your tax planning all shape that number, and some tax strategies have to be in place a year or more ahead of a sale. Planning structure early also widens your buyer pool, which is what ultimately drives price up.

The bottom line

The price on the offer sheet is not what you keep. The cash at closing, the seller note, the rollover equity, the financing, and the taxes all decide your real proceeds, and the smart time to plan them is before you go to market.

If you’re thinking about what your business might be worth and how to structure a sale that protects your bottom line, a confidential conversation costs nothing. Troy Frank and the team at Indiana Equity Brokers have closed more than 880 deals for Indiana business owners, with no upfront fees and a free business valuation to get started. You can reach Troy at troy@indianaequitybrokers.com

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