Eight stages, costed and timed, August 2026

How to Buy a Business: Find Businesses for Sale, Value It, and Buy an Existing Business

Buying a business runs through eight stages and takes about four months end to end on a small US acquisition. Empire Flippers, the one marketplace that publishes outcome data, reported an average of 125 days from listing to sold when we read its scoreboard on 31 August 2026, with sellers achieving 95% of asking price. If you finance with an SBA 7(a) loan you need a minimum 10% equity injection, so roughly $50,000 of cash supports a $500,000 purchase price, and the closing stack adds about $21,000 to $36,000 on top of that down payment.

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Each stage below is costed and timed separately, because the thing that surprises first-time buyers is never the price of the business. It is the fee stack sitting on top of it, and the fact that diligence and financing run in parallel rather than one after the other. Every figure here was read from a primary source: the SBA Standard Operating Procedure documents, SBA fee notices, and each marketplace's own published terms. Buyouts is a marketplace for AI SaaS with verified MRR, ARR, growth and churn, so this page says plainly where a software purchase is easier than a main street one and where it is harder. Browsing Buyouts is free, and buyer membership is planned rather than currently on sale.

Most first-time buyers price the business and forget the transaction. On a $500,000 SBA-financed acquisition the down payment is $50,000 and the closing stack adds roughly $21,000 to $36,000 more before you own anything.

The whole process, stage by stage

How to buy a business in eight stages, with the time and the cost of each

Elapsed times are what a small US acquisition realistically takes rather than a best case, and stages six and seven overlap: diligence and loan underwriting run at the same time, which is why the total is roughly four months and not the sum of the rows. Dollar figures are ranges observed in the US small-deal market, and the SBA figures are the published rules read firsthand.

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Stage	What actually happens	Typical elapsed time	What it costs the buyer
1. Set your ceiling before you look	Work backwards from cash, not from ambition. SBA requires a minimum 10% equity injection on a change of ownership, so $50,000 of usable cash supports roughly a $500,000 purchase price, and you still need the closing stack and post-close working capital on top	1 to 2 weeks	Nothing, and this is the stage people skip
2. Find businesses for sale	Search the marketplaces and brokers that carry your asset type. Deal flow and price band vary enormously by venue, and the same business is rarely listed in two places	1 to 6 months, the longest stage by far	Free to browse almost everywhere. Flippa lists a $49 per month buyer tier and Acquire.com paid buyer membership starts at $390
3. Sign an NDA and unlock the financials	Anonymized listings become a real company name, a real URL and a real profit and loss statement only after you sign. Curated venues also qualify you on capital before they open the file	Same day to about a week per listing	Nothing on the venues we checked
4. Screen the numbers yourself	Reconcile the claimed profit to bank deposits, check revenue concentration, churn and how much of the result depends on the owner personally. Most candidates die here, and they should	2 to 5 days per serious candidate	Nothing, or a few hundred dollars for an accountant to read the file
5. Agree a price and sign a letter of intent	The LOI fixes price, structure, an exclusivity window and what diligence you get. It is normally non-binding on price and binding on exclusivity and confidentiality	1 to 3 weeks of negotiation	Legal review of the LOI, commonly $500 to $2,500
6. Due diligence	Financial, legal, technical and customer diligence against the exclusivity clock. On an SBA deal the lender orders its own independent valuation, and from 1 October 2026 that is required on every change of ownership rather than only above $250,000	30 to 60 days, running alongside stage 7	Independent business valuation commonly $2,000 to $5,000, plus a Quality of Earnings report at a $3,000,000 purchase price and above
7. Arrange the financing	SBA 7(a) is the default route for a US acquisition and caps at $5 million. Underwriting needs historical earnings that clear the debt service coverage floor, which rises from 1.15 to 1.25 for a first-time acquisition on 1 October 2026	60 to 90 days from a complete application	Upfront guaranty fee of 2% to 3.75% of the guaranteed portion, plus a lender packaging fee commonly $2,500 to $5,000
8. Purchase agreement, escrow and transfer	Asset purchase agreement or stock purchase agreement, funds into escrow, then a staged handover of code, domains, accounts, contracts and customer records before escrow releases	2 to 6 weeks	Buyer legal drafting commonly $5,000 to $15,000. Escrow is included at no separate buyer charge on Empire Flippers and Acquire.com

SBA rules are from SOP 50 10 8 with technical updates effective 1 June 2025 and SOP 50 10 8.1, effective for applications issued an SBA loan number on or after 1 October 2026, read firsthand in August 2026. The 125 day average and the 95% of asking price figure are from the Empire Flippers Scoreboard, read 31 August 2026, which also reported 2,670 businesses sold and $604,659,848.01 in cumulative sales volume. Marketplace membership prices were read from Flippa and Acquire.com in July and August 2026 respectively. Professional fee ranges are observed market ranges, not quotes, and your advisors set their own prices. Nothing here is legal, tax or lending advice.

Published rates, our arithmetic

What buying a $500,000 business actually costs at close

This is a worked example on a $500,000 purchase price financed with an SBA 7(a) loan, because the purchase price is the number everybody quotes and the closing stack is the number that decides whether you can actually do the deal. The dollar figures in the third column are our arithmetic on published rates and observed market ranges, not a quote from any lender, valuer or attorney.

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Line item	Who charges it	On a $500,000 purchase (our math)	Notes
Equity injection, the down payment	Required by SBA, paid into the deal	$50,000, being the 10% minimum	From 1 October 2026 the 10% cannot be reduced or waived on a first-time acquisition
SBA upfront guaranty fee	SBA, collected by the lender	$11,250, being 3% of the $375,000 guaranteed portion	FY2026 band for loans of $150,001 to $700,000. SBA guarantees 75% above $150,000
Lender packaging fee	The lender	Commonly $2,500 to $5,000	Not set by SBA. Ask for the figure in writing before you apply
Independent business valuation	An accredited valuer, ordered by the lender	Commonly $2,000 to $5,000	Required on every change of ownership from 1 October 2026. A valuation you or the seller commissioned is unusable
Quality of Earnings report	An independent accountant, prepared for the lender	Not required at this price	Mandatory from 1 October 2026 at a purchase price of $3,000,000 and above
Buyer legal fees	Your attorney	Commonly $5,000 to $15,000	LOI review, purchase agreement, assignment of IP, domains and contracts
Escrow and transfer	Escrow agent or the marketplace	$0 on Empire Flippers and Acquire.com, which include it	Independent escrow on a private deal typically runs 0.5% to 1% of the price
Broker commission	The seller, out of proceeds	$50,000 at a flat 10%	Below $1,000,000 a flat 10% and the Double Lehman scale produce the same number. You pay it indirectly, through the asking price
Buyer cash needed at close	Total of the buyer-paid rows above	About $70,750 to $86,250	Excludes post-close working capital, which is the second thing first-time buyers underestimate

Guaranty fee bands are from SBA Information Notice 5000-872051, 7(a) Fees Effective October 1, 2025 for Fiscal Year 2026: 2% on loans of $150,000 or less, 3% from $150,001 to $700,000, and 3.5% of the guaranteed portion up to $1,000,000 plus 3.75% above that from $700,001 to $5,000,000. That notice expires 1 October 2026, so FY2027 fees will be published separately and this row should be re-checked after that date. Equity injection and valuation requirements are from SOP 50 10 8.1. The Lehman comparison is our arithmetic on the public Double Lehman scale of 10-8-6-4-2 and is not any named broker's published rate. Escrow inclusion was read from the Empire Flippers and Acquire.com buyer terms in August 2026. Professional fee ranges are observed, not quoted. This is educational content for buyers, not lending, legal or tax advice.

Side by side

Buying an online business versus buying a main street business

A fair look at what each does well. Both are useful. Here is where they differ.

Feature	Buyouts	Buying a main street business
How you verify the revenue	Read-only processor and analytics access, so MRR, ARR, growth and churn reconcile at source	Tax returns, bank statements and a physical site visit, reconstructed by the lender or a QoE analyst
How long the search takes	Days to weeks. Listings are searchable, filterable and priced in public	Weeks to months. Much of the good inventory never gets listed publicly at all
What secures a loan against it	Nothing tangible. Code, contracts, a customer base and a domain	Equipment, inventory, receivables and often owner-occupied real estate
How easily it gets financed	Harder. A smaller pool of lenders, and some decline on collateral grounds alone	The mainstream of 7(a) acquisition lending, with many willing lenders
Loan term available	Amortization capped at 10 years, since there is no real estate to blend	Up to 25 years on the real estate portion when property is part of the purchase
What the handover involves	Transferring code repositories, domains, cloud accounts, payment processors and customer records	Assigning a lease, retaining staff, transferring licenses and keeping local demand intact
Where the risk actually sits	Churn, key person dependency, platform dependency and undocumented code	Location, lease renewal, staffing and the local economy
Can you run it from anywhere	Yes, and SBA lenders may skip a physical site visit for a business that operates virtually	Rarely. Most main street businesses need an owner or a manager on site

Comparison reflects general, publicly understood positioning. Capabilities change, so check each marketplace for the latest. Trademarks belong to their owners.

Why founders and buyers pick Buyouts

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Stage two is where the months go, so pick venues before you browse

First-time buyers assume diligence is the long part. It is not. Diligence is a fixed 30 to 60 days once you have a signed LOI, and financing runs alongside it. The open-ended stage is the search, and it stays open-ended for people who browse everything instead of choosing where to look. Venues split hard by asset type and price band: Empire Flippers and Website Closers curate and vet, Flippa lists everything from a $500 domain upward, Acquire.com concentrates on software, Motion Invest and Investors Club focus on content and ecommerce, and Buyouts is built for AI SaaS specifically. The practical filter is to name your asset type and your price ceiling first, then work only the two or three venues that actually carry it. If you are still deciding what kind of asset you want, the honest venue map is on our guide to where an online business for sale is actually listed, and the fee side is on our business broker fees breakdown.

The seller pays the broker, but you fund it

Every US business brokerage we checked charges the seller, not the buyer, and most buyers read that as free. It is not. A 10% success fee on a $500,000 sale is $50,000 the seller has to clear before the deal is worth doing, so it goes into the asking price before you ever see the listing. Empire Flippers publishes its blended scale in full and it reaches a flat 15% of the sale price between $66,666.66 and $700,000, which is the highest published rate we found anywhere in this market. Acquire.com publishes 6% to 8% depending on band. Six of the ten venues we read publish no seller commission at all. That matters commercially: on a curated marketplace with a 15% commission, the seller needs 15% more gross than a private sale would require, and either the price reflects it or the seller will not list. Knowing the venue commission tells you roughly how much negotiating room exists before the seller walks.

The financing rules change on 1 October 2026 and it is decided by your loan number

If you are financing with SBA 7(a), the deal you model in September may not be the deal you can close in October. SOP 50 10 8.1 applies to every application issued an SBA loan number on or after 1 October 2026, and the cutoff is the loan number, not your closing date. Three changes hit acquisitions directly. An independent business valuation becomes mandatory on every change of ownership rather than only above $250,000. The debt service coverage floor for a first-time acquisition rises from 1.15 to 1.25, which means the same cash flow supports a smaller loan and therefore a lower price. And projections can no longer be used to demonstrate coverage on a change of ownership, so historical earnings have to carry the deal on their own. A price agreed in August against 1.15 coverage can fail underwriting in October without a single number in the business changing. The useful question for your lender this week is not when you will close, it is when your application gets a loan number.

Good questions

Buying a business, answered

Beyond the purchase price, budget roughly 4% to 7% of the price in closing costs. On a $500,000 SBA-financed acquisition our worked example comes to about $70,750 to $86,250 of buyer cash: a $50,000 equity injection, an $11,250 SBA guaranty fee, $2,500 to $5,000 for lender packaging, $2,000 to $5,000 for the required valuation, and $5,000 to $15,000 in legal fees. Post-close working capital sits on top of all of that.

About four months from serious search to close on a small US acquisition. Empire Flippers reports an average of 125 days from listing to sold across its own completed transactions, read 26 August 2026. Diligence takes 30 to 60 days and SBA underwriting takes 60 to 90 days from a complete application, but those two run in parallel rather than back to back. The open-ended part is the search itself, which can take anywhere from a month to half a year.

Through marketplaces, brokers and direct outreach, and the venue decides what you see. Marketplaces list publicly and let you filter by price, model and metrics. Brokers carry curated inventory and qualify you before opening the file. Direct outreach to owners finds businesses nobody else is bidding on, at the cost of a much longer search. Most buyers get the best result by naming their asset type and price ceiling first, then working only the two or three venues that actually carry it.

On an SBA 7(a) acquisition you cannot, and from 1 October 2026 the rule tightens further: the 10% minimum equity injection cannot be reduced or eliminated on a first-time acquisition. A seller note can supply part of that injection, but only if it is on full standby for the entire loan term with no payments of principal or interest, and it can cover no more than half the required amount. Outside the SBA program, seller financing on ordinary amortizing terms and equity partners are the realistic routes, and both cost more than a bank loan.

Yes, but financing gets harder. SBA lenders document relevant industry or management experience in the credit memo, and a first-time buyer with no sector background is a weaker file at the same coverage ratio. Two things offset it: a business with documented systems and a team that does not depend on the departing owner, and a longer seller transition. Under SOP 50 10 8.1 a seller consulting agreement can run up to 24 months in aggregate, twice the current 12 month cap.

Buying starts you with revenue, customers and a working product, which is why it is the faster route to owner income and the only route a lender will finance. Starting one is cheaper and gives you full control of the direction. The honest trade is that you are paying for the removal of the riskiest phase, and the price of that removal is the multiple. On the marketplaces we track, a typical online business sells at about 2.2x annual net profit, so you are buying roughly two years of proven earnings.

Three years of profit and loss statements, balance sheets and business tax returns, plus bank statements covering the trailing twelve months so you can reconcile the reported profit to actual deposits. Then the operating detail: customer and supplier contracts, employee and contractor agreements, any lease, licenses and permits, an asset list, and disclosure of outstanding debt and litigation. For an online business add analytics access, payment processor exports, domain and repository ownership records, and a churn breakdown by cohort.

A letter of intent sets out the price and structure you have agreed and states your intent to buy. The price and terms are normally non-binding, but the exclusivity and confidentiality clauses usually are binding, which is the part that matters. Exclusivity is what stops the seller running a parallel process while you spend money on diligence. Read the exclusivity window carefully: 30 days is tight for an SBA deal, and 60 to 90 days is more realistic.

Most US small acquisitions are asset purchases, because you take the assets you want and leave the liabilities behind, and you get a stepped-up tax basis on what you buy. A stock purchase transfers the entity whole, including contracts that cannot easily be assigned and any liabilities you did not find, which is why sellers usually prefer it and buyers usually do not. SBA finances both. Decide it before the LOI, because it changes the price the seller needs.

The binding limit is not what you want to borrow, it is what the earnings support. SBA underwriting from 1 October 2026 requires a debt service coverage ratio of at least 1.25 on a first-time acquisition, calculated on the last fiscal year or a two-year average, with global coverage of at least 1:1. In practice, if the business does not produce enough cash to cover post-transaction debt service 1.25 times over, the loan amount comes down and you fund the difference in equity rather than negotiating the ratio.

Reconcile the reported profit to money that actually arrived. For a main street business that means bank statements against the profit and loss statement and against the tax returns, which is precisely the Cash Proof that becomes mandatory inside a Quality of Earnings report at $3,000,000 and above from 1 October 2026. For an online business it is easier: subscription revenue lands in a payment processor, so read-only processor and analytics access shows you MRR, growth and churn at source rather than in a spreadsheet the seller prepared.

Seller financials that do not survive verification. The most common failure is not the buyer or the bank, it is a seller whose reported earnings do not reconcile once the lender pulls IRS transcripts and the bank statements. Second most common is revenue concentration discovered late, where one customer turns out to be a third of the business. Third is key person dependency, where the earnings walk out the door with the owner. All three are findable in stage four, before you have spent anything.

No. Business brokers are engaged and paid by sellers, so a buyer works with the listing broker rather than hiring one. What a buyer does need is an attorney for the purchase agreement and an accountant or QoE analyst for the financials, and on an SBA deal the lender orders its own independent valuation regardless of what anyone else has produced. Buying direct from an owner avoids the commission being priced in, at the cost of a much longer search and no vetting.

It is possible through a Rollovers as Business Startups arrangement, in which a new C corporation sponsors a retirement plan that buys stock in that corporation, and the proceeds fund the acquisition. SBA does count properly documented ROBS funds toward the equity injection. It is also heavily rule-bound and audited, so it is not something to attempt without a specialist provider and your own tax counsel. Treat the fees and the ongoing compliance burden as part of the cost, not a footnote.

The purchase price itself is not deductible as an expense. In an asset purchase the price is allocated across the assets acquired and recovered over time through depreciation and amortization, with goodwill and most intangibles amortized over 15 years under section 197. Interest on the acquisition loan is generally deductible, and so are the transaction costs allocated to financing rather than to the acquisition itself. This is general information, not tax advice, and the allocation is worth paying an accountant to get right before you sign.

Small US businesses are priced on a multiple of earnings, not revenue. On the online marketplaces we track, Empire Flippers reported a typical sale at 26.4x average monthly net profit when we read its scoreboard on 31 August 2026, which is about 2.2x annual profit by our arithmetic, with distressed sales at 14.1x monthly and premium listings above $1,000,000 at 37.0x. For private software deals Aventis Advisors put the median at 4.5x revenue across 543 disclosed transactions to April 2026. Check which basis a listing quotes before you compare two numbers.

More comparisons

See how Buyouts compares

vs The letter of intent

Letter of intent to buy a business

Every clause in an LOI, whether it binds you at signature, and what each marketplace actually requires before a seller stops taking other offers.

vs The purchase agreement

Asset purchase agreement

What a definitive purchase agreement costs, what every clause does, and which structure the SBA will actually finance.

vs M&A due diligence

M&A due diligence checklist

Every workstream in an acquisition diligence process, the documents that actually prove each claim, and what the deal room vendors will and will not tell you about price.

vs Earnout agreement

Earnout agreement

The three mechanisms that move a purchase price after the handshake, what each one costs to paper, and the sample size that tells you how rare earnouts really are.

vs Purchase price allocation

Purchase price allocation

The seven asset classes, the residual method, and what each class is actually worth to a buyer versus a seller, read from the statute and the IRS instructions.

vs Business partner buyout

Business partner buyout

How a partner buyout is structured, what the SBA actually requires you to put down, and the clause in your partnership agreement that decides the tax.

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