The Top 5 Best & Worst Things in the Business Brokerage Industry This Year — Plus Our Predictions for 2026

This year reminded us of something the SMB community has always known but sometimes forgets: this is still a relationship business.  Just one being reshaped by capital markets, buyer sophistication, and shifting seller expectations.

Some trends strengthened deal quality and improved outcomes for prepared sellers and disciplined buyers. Others quietly killed transactions late in the process, often after months of effort. As interest rates, SBA policy changes, new tariffs, and buyer behavior evolved, the gap between sellable and listed businesses widened dramatically. You can guess which ones benefited quickly…

In this article, we break down the top five best and worst things we saw in the business brokerage industry this year, followed by our predictions for 2026 and what it all means for sellers, buyers, and brokers moving forward. You’ll get direct insights from our decades of experience selling businesses in the Louisiana and the Gulf South to what we see the future may hold.

Market Context: What Defined the Year in Business Brokerage, the SMB community and Lower Middle Market.

Transaction Volume vs. Deal Quality

While overall transaction volume fluctuated depending on segment, deal quality improved at the top end and deteriorated at the bottom. Well-prepared businesses with clean financials and transferable operations sold quickly. Poorly documented, owner-dependent businesses stalled or failed outright. Businesses with messy financials often didn’t sell at all.

Seller Optimism vs. Buyer Discipline

Sellers entered the year optimistic, many anchored to pandemic-era valuations. Buyers, however, grew increasingly disciplined. Access to capital still existed (mind you at an all-time high in some cases) but only for deals that could withstand tighter underwriting (SBA SOP changes) and higher interest rates.

Interest Rates: Main Street vs. Lower Middle Market

Higher rates hit Main Street businesses harder due to SBA debt service coverage constraints and SOP changes. In contrast, the Lower Middle Market benefited from alternative capital sources, private equity dry powder, and more flexible structures. With changes in the SBA SOP it also limited new buyer entry (mostly private investors) into trade sectors or businesses that need specialty licensing to operate. Those especially tied to the owner himself. The days of easy roll over equity were stripped away.

Shifts in Funding Availability

Capital didn’t disappear; it became selective in what it was invested into while simultaneously expanded its spheres of interest. SBA lenders tightened. Some exited marginal deals entirely. Early lender involvement shifted from “helpful” to mandatory.

Why this matters:

• Sellers need better timing and preparation. Now more than ever getting prepared to go to market is crucial to getting sold.
• Buyers and more importantly, Sellers, must understand evolving deal structures
• Brokers must underwrite reality, not hope. Sharing the harsh facts of 2025 was hard for many sellers we spoke with.

The Top 5 Best Things in the Business Brokerage Industry This Year

#5: Strong Buyer Demand for Quality Businesses

Despite headlines, capital remains available for the right deals and buyers are reaching continuously.

• Search funds, strategic buyers, and individual operators stayed active
• Buyers paid premiums for:
  • Clean, accrual-based books
  • Recurring or contracted revenue
  • Management depth beyond the owner
  • Transferability of key knowledge, licensing, etc

Key takeaway:
Demand didn’t drop, standards rose. They had too because of all the external factors we listed above. Buyer demand for strong businesses had not dropped 1%.

#4: Better Seller Education & Preparation

One of the most encouraging trends this year was improved seller awareness.

More owners now understand:

• The difference between add-backs and real cash flow (in most cases).
• Having a plan post sale is just as important and timing the sale of the business.
• The importance of documentation, SOPs, and systems

Fewer “back-of-the-napkin” valuations appeared, replaced by readiness assessments and structured sell-side preparation.

Prepared sellers closed faster and often at higher effective values. More than in previous years these were the deals that got done with the tightening of economic and financing trends.

#3: Increased Use of Seller Notes & Creative Structures

As valuation gaps widened, structure became the solution.

• Seller financing used strategically, not reluctantly
• Earnouts tied to performance, not wishful thinking (within reason)
• Risk-sharing aligned incentives post-close

These structures worked especially well in:

• Trade businesses
• Professional services
• Owner/key employee dependent companies

Structure didn’t weaken deals, it saved them. In some cases, it was the only way a deal could work. We structured several deals this way in 2025.

#2: Business Owner Integration of AI

Owners who integrated AI meaningfully saw tangible gains.

Common uses included:

• ChatGPT for SOPs, training, and documentation
• AI bots for customer service and lead qualification
• Process automation to reduce owner dependency

AI wasn’t magic but used correctly, it increased scalability and valuation defensibility. It also helped with transferability and reduced new owner integration time.

#1: Advisors Finally Recognizing the Value of Broker Relationships

Perhaps the most underrated positive trend: other professional advisors leaning into broker partnerships.

We saw stronger collaboration from:

• Wealth managers
• Consultants
• CPAs and attorneys

Early alignment created better exits, stronger tax outcomes, and fewer surprises.

Deals done in isolation underperformed. Relationships won. Many outside the industry saw value in increased communication and collaboration with our team.

The Top 5 Worst Things in the Business Brokerage Industry This Year

#5: Unrealistic Seller Price Expectations Carrying Over

Many sellers remained anchored to:

• Pandemic-era multiples
• A neighbor’s exit story (often inflated and not true)
• “What I need to retire” (unrealistic return from the sale)

They failed to account for:

• Interest rate impact on buyer purchasing power
• SBA DSCR requirements
• Decrease in revenue or profitability in their business

Reality eventually caught up often after months on the market. We had many conversations with clients expressing this to them. Deal structure, multiples and timelines once possible were no longer available. Owners that understood this got sold. The ones that didn’t listen, never did.

#4: Poor Financial Records Killing Deals Late

Nothing derailed more deals late than bad financials.

Common issues:

• Inconsistent P&Ls
• Grant money missing in revenue statements/bottom line
• Carve-outs not reflected accurately in bookkeeping
• Owners stalling document production due to drops in financial performance.

Deals died not because businesses were bad but how the information was presented and the timely manner it was produced. Owners that stalled producing updated P&L’s for fear of scaring buyers off destroyed trust in the deals. Owners that were responsive and produced sold.

#3: Misuse of AI & Automation in Valuations

AI tools were often used without context.

We saw:

• Buyers spamming brokers with AI-generated inquiries and scrapping business for sale websites with no gameplan, analysis or structure.
• Virtual Assistant (VA’s) driven outreach flooding listings
• Cookie-cutter AI valuations ignoring:
  • Owner dependency
  • Market nuance
  • Operational risk

Instant valuation calculators misled both buyers and sellers and wasted time.

#2: Deal Fatigue from Tire-Kickers

Inquiry volume increased, but conversion fell.

Problems included:

• Buyers submitting offers without capital
• Lack of lender qualification (worsened by SBA SOP changes)
• Data fishing without intent
• Relying on Virtual Assistants or Lead Generation Firms to spam brokers.

Brokers and sellers bore the time cost. Discipline became essential. Online “guru’s” selling outsourced lead generation for buyers destroyed credibility for many using their services. NOTE: If you are looking to acquire a business, do not pay a firm $5,000 – $10,000 to scrape BizBuySell, Sunbeltnetwork.com or any other platform for leads. We spoke to several buyers who made this mistake and wasted their money and time.

#1: SBA SOP Changes

The most disruptive force of the year.

Key impacts:

• Major changes to rollover equity
• Seller note absorption requirements and hold backs
• Reduced flexibility for licensed and owner-dependent businesses

Many otherwise viable deals stalled or died outright.

SBA didn’t eliminate deals but it eliminated weak structures. Not all changes in the SOP were bad. However, many of the great opportunities from the previous changes were swept away in an overreaction such as Seller Financing for equity injection, seller rollover equity and more.

Our Predictions for 2026

Prediction #1: Deal Structure Will Matter More Than Price

Buyers will prioritize:

• Risk allocation
• Working capital accuracy
• Clean, lender-friendly structures and transparency

With fewer rollover options, creativity returns. Get your seller financing fears put away.

Prediction #2: Lenders Will Continue Tightening (Early 2026)

Strong businesses will still be funded. Marginal ones won’t.

Expect:

• Early lender involvement as standard
• Some lenders exiting weaker segments
• Zero tolerance for poor documentation

Prediction #3: Failed Listings Will Reset Seller Expectations

Overpriced businesses will linger. Seller’s will notice this.

Sellers will be forced to:

• Reduce price
• Improve operations
• Delay exits
• Increased buyer demand will shift to quality businesses fast.

Prepared sellers will dominate outcomes. It’s that simple.

Prediction #4: Industry Consolidation Accelerates

The rush is on.

Expect increased roll-ups in:

• Trades
• Healthcare
• Professional services

Platform vs. add-on valuation gaps will widen. AI-scalable industries will consolidate fastest.

Prediction #5: More Business Inventory Will Hit the Market

Life doesn’t pause for interest rates, SBA SOP changes, tariffs, etc.

Drivers include:

• Aging owners
• Lease expirations
• Consecutive down years
• Built-up capital pressure
• Sadly, health and family issues.

Some sellers will enter weaker — but forced — markets. Have your plan now. We help owners daily prepared for these times so when it is time to exit, it isn’t rushed and unprepared.

What This Means for Sellers and Buyers

For Sellers

• Start preparing 18–36 months out, if not today.
• Reduce risk, not just boost revenue
• Build the business for transferability
• Expect direct buyer outreach (some good and really bad), have a plan.

For Buyers

• Get lender-qualified early
• Underwrite downside scenarios
• Competition for fundable deals will intensify
• Don’t use fly by night services promising unlimited deal flow and private access.

Final Takeaways

The Main Street and Lower Middle Markets remain healthy but smarter, tighter, and less forgiving.

• Preparation beats optimism
• Structure beats headline price
• 2026 rewards disciplined participants

We’ll revisit these predictions mid-year to see how they’re playing out and continue sharing real-world insights from the market.

If you’re selling, buying, or advising in this space — now is the time to get serious.

In this episode, we go deeper on:

• Actionable tips,
• Real-world stories
• A deeper breakdown of the topics covered above

Follow the Steps to Sold Podcast on LinkedIn , listen the Steps to Sold Podcast on Spotify. Connect with Brandon Bourgeois on LinkedIn and Chris Sater on LinkedIn.