How Are SMB Deals Commonly Structured?

4 Common Deal Structures (and Which One Might Fit You)

If you’ve never sold a business before, you’re not alone. Most small business owners haven’t — and unless you're in the M&A world, no one hands you a playbook.

One of the biggest misconceptions? That a buyer either shows up with a big check… or they’re not serious. It’s not just all-cash or nothing. The reality is: there are several legitimate, professional, and seller-friendly ways to structure a deal — many of which can actually lead to a higher sale price, a smoother process, or both.

This guide will walk you through the four most common SMB deal structures — and how they might work in your situation.

1. Bank or SBA-Backed Loan

What it is:
The buyer secures a loan (usually from a bank or SBA lender) to fund most or all of the purchase. You get paid in full at closing.

Why sellers like it:

• You receive your full payment up front
• It often allows for a higher price than an all-cash offer
• Buyers using SBA financing are typically vetted and well-prepared

Things to consider:

• Requires clean, consistent financials and filed tax returns
• The process can take longer — typically 60–90+ days
• SBA lenders may require a short transition period where you help hand off operations

A good fit if:
You want to be paid out in full and are okay with a longer, structured process that ensures financing is in place.

2. All-Cash at Close

What it is:
The buyer uses their own capital to fund the entire purchase. You get paid in full on the day the deal closes.

Why sellers like it:

• Fast, clean exit
• No follow-up required
• No financing delays or third-party approvals

Things to consider:

• May come with a lower offer to offset the buyer’s risk
• Most common in smaller or simpler deals
• Buyers may ask for more detailed due diligence since they’re funding the deal directly

A good fit if:
You want a quick, no-strings-attached sale and are open to a potentially lower offer in exchange for speed and certainty.

3. Seller Financing (also called a “Seller Note”)

What it is:
You agree to accept a portion of the purchase price over time (typically 2–7 years), often with interest.

Why sellers like it:

• Can increase the total sale price
• Creates an income stream post-sale
• Makes the deal more accessible to qualified buyers

Things to consider:

• You take on some risk (though terms are secured in writing)
• You’ll want to feel confident in the buyer’s ability to operate the business
• Often combined with a down payment or SBA loan

A good fit if:
You’re open to being paid over time and like the idea of ongoing income and a potentially higher valuation.

4. Earnouts or Performance-Based Payments

What it is:
Part of the sale price is paid over time — but only if the business hits certain goals (e.g., revenue, profit).

Why sellers like it:

• Lets you share in the upside if the business grows
• Helps bridge the gap when a buyer is concerned about future performance
• Useful if your business has momentum but limited historical proof

Things to consider:

• Earnouts require clear agreement on metrics and tracking
• Not every business needs them — they’re most common in fast-growth or transition-heavy deals
• They’re usually one part of a blended deal (not the whole thing)

A good fit if:
You’re confident in your business’s future and want to participate in its success, even after stepping away.

A Few Things Most Sellers Don’t Know (But Should)

These aren’t “secrets” — but they’re rarely explained clearly. Understanding them early can reduce stress, improve your outcome, and help you make smarter decisions.

Financing doesn’t mean “risky.”

SBA loans, seller financing, and blended structures are very common in small business sales. A well-structured deal with financing can be just as secure as cash — and it often brings in more qualified buyers.

Creative deals can unlock a higher price.

Buyers are often willing to pay more overall when there’s room to structure the deal — whether that means part of the payment is financed, performance-based, or spread out. Flexibility can boost your value without sacrificing security.

The way you get paid affects how you're taxed.

All-cash isn’t always the best after taxes. Spreading payments over time (installment sale), or structuring a deal as an asset vs. stock sale, can defer or reduce your tax burden. A slightly different structure could net you more in the end — even if the total price is the same.

Most sellers haven’t done this before — and that’s okay.

Buyers don’t expect you to be an expert. A good buyer will explain things clearly, walk through next steps, and make sure you’re comfortable with every part of the process.

What’s the “Best” Deal Structure?

It depends. Every business is different. So is every seller. The right structure depends on:

• How quickly you want to exit
• Whether you prefer a lump sum or income over time
• How clean and transferable your business is
• What kind of buyer you’re working with

If you're curious which structure might make the most sense for your business — or want to understand how buyers typically approach deals like these — I'm always happy to talk it through. Book your discovery call here.

Deal Structure Examples