How do you compete when other buyers want the same business?

What do sellers weigh besides price?

• Certainty. A deal that falls apart after 90 days of exclusivity costs the seller time and other buyers. A seller may accept a lower price from a buyer who will close.
• Cash at closing. Most of the value is paid at closing in today's market. A seller comparing two offers looks at the closing check first.
• Speed. SBA deals typically take 60 to 120 days from LOI to closing. A buyer who can credibly close at the short end has an edge.
• Transition. How long the seller must stay, and in what role.
• People and legacy. What happens to employees, the name and customers. Retirement is the top reason owners sell, per the IBBA, and retiring owners often care about this.
• Simplicity. Fewer conditions and fewer surprises.

How do you show certainty of closing?

Show, don't claim. Every buyer says they can close.

1. A lender who has seen the deal. A pre-qualification letter from an SBA lender that has reviewed this business's summary financials carries more weight than a generic letter.
2. Proof of your equity. The injection is at least 10% of project costs. Show it is in your account and seasoned about 30 days, or documented as to source.
3. Eligibility. Since March 1, 2026, SBA loans are available only to businesses owned by U.S. citizens or U.S. nationals with a U.S. principal residence. If you qualify, say so. If a co-buyer does not, solve it before you bid.
4. A named deal team. Your lawyer and CPA, with their availability.
5. A specific diligence plan. A short document list and timeline, not "full due diligence to buyer's satisfaction."
6. Terms the lender can approve. No earnout, which SBA rules prohibit. A seller note that fits SBA standby or coverage rules. A transition within the 24-month limit.

Which terms can you offer that cost you little?

• The seller's closing date, if it is within the lender's timeline.
• The transition the seller wants. Some want to leave quickly; some want to stay. Under SBA rules either is possible up to 24 months.
• Commitments on employees. Keeping the team is usually in your interest anyway.
• A smaller seller-financing request. This costs you more cash or more bank debt, but it is what sellers value most.
• A shorter diligence period, if you have done your cheap checks before the LOI. Typical diligence on SBA deals is 30 to 60 days.

Worked example: two offers on the same business

A business asks $1.5 million on SDE of $520,000 (2.88x). Two buyers bid. Both use SBA loans at 10% over 10 years, take a $120,000 salary (leaving $400,000 for debt), and add $80,000 of fees and working capital. Seller notes use the median listing terms of 7% over 3 years, not on standby.

1. Offer A: $1.5 million, 30% seller note ($450,000). The seller's cash at closing: $1.05 million. Project costs: $1.58 million. Injection: $158,000. SBA loan: $972,000, about $154,100 a year. Seller note: about $166,700 a year. Coverage: $400,000 divided by $320,900 = about 1.247x, just under the 1.25x floor. The lender will likely push back.
2. Offer B: $1.4 million, 10% seller note ($140,000). The seller's cash at closing: $1.26 million. Project costs: $1.48 million. Injection: $148,000. SBA loan: $1.192 million, about $189,000 a year. Seller note: about $51,900 a year. Coverage: $400,000 divided by $240,900 = 1.66x.
3. Compare. Offer B is $100,000 lower but puts $210,000 more in the seller's hands at closing, and is far more likely to be approved.

The higher headline price is the weaker offer.

When should you raise your price, and when should you stop?

Decide your walk-away price before the bidding starts. Two limits set it.

• The valuation cap. Total debt, including seller notes, cannot exceed the independent valuation. Every dollar of price above it is your cash.
• Coverage. 1.25x for an initial acquisition, on historical cash flow. Projections cannot be used.

Within those limits, a modest increase can make sense for a business you want. Beyond them, the winner of the auction is the buyer who overpaid. Losing a deal is cheaper than owning the wrong one.

Where these numbers come from: Cash at close and seller motives from the IBBA Market Pulse Q2 2026. Buyer financing plans from the BizBuySell buyer survey. Median seller-note terms from Big Ideas DB on seller financing. Timelines from BizBuySell's SBA loan timeline. SBA rules from this guide to SBA SOP 50 10 8.1 and Cantrell Firm. Rate cap from NerdWallet; check current prime. SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026; lender practice under it is still settling and these are secondary summaries, so confirm current terms with your SBA lender.

Related questions

Should I offer above asking to win?

Only if the price still passes the valuation and coverage tests. If the business is worth more to you because it fits a business you already own, that value is yours; do not hand all of it to the seller.

Does a cash buyer always win?

Not always. A cash buyer offers certainty, but a well-prepared SBA buyer with a lender already engaged can compete. Sellers also weigh price and transition.

How do I find out about other bidders?

Ask the broker directly how many offers are expected and what the seller cares about most. The second answer is usually more useful than the first.

What comes next

One of the terms sellers care about most is how the deal is structured for tax. The next question is asset purchase or stock purchase: which should a buyer choose? The buyers who end up with the most valuable companies decide what the business goes into before they buy it, and a buyer with a clear plan for the business is often the one a retiring owner trusts.

Related articles

• Should you offer the asking price in your letter of intent?
• What should a letter of intent to buy a business include?
• What happens after you sign a letter of intent?
• How do you get business brokers to take you seriously?
• How do you build a holding company for acquisitions?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.