Oppsheet Pulse

The seller-financing gap: 90% vs. 29%

BizBuySell’s Q2 2026 Insight Report is out, and the headline numbers are quiet: 2,117 closed transactions (down about 10% year over year), a median sale price of $349,250 (basically flat), and cash flow multiples holding around 2.7x. The number that matters is buried in the financing section. Roughly 78% of surveyed buyers plan to lean on SBA financing, and 90% expect a seller note to be part of the structure, but only 29% of sellers say they plan to offer one. With SBA underwriting tighter this year, that gap is where deals are stalling. One bright spot for this audience: service businesses made up 40% of closed deals, and time on market for services improved 9% year over year. Demand for home services and recurring revenue hasn’t cooled. If you’re heading to market, decide your financing posture before buyers ask.

Why home services keeps clearing while bigger deals wait

The lower middle market has a quality the headline M&A market doesn’t: businesses that people need in every economy. HVAC, plumbing, electrical: recurring demand, fragmented ownership, and a generation of owners hitting retirement age with no succession plan. That’s why searchers and independent sponsors keep concentrating here while larger auctions stretch out. The constraint isn’t buyer appetite; it’s owners who never hear that a market for their business exists. That’s the gap Oppsheet exists to close.

The multiple isn’t the deal

First-time sellers anchor on a multiple. Experienced buyers anchor on the structure that makes the multiple real: how much cash at close, what a seller note carries, whether an earnout has terms anyone can actually hit. Two offers “at the same multiple” can be hundreds of thousands of dollars apart in outcome. The practical takeaway for owners: compare structures, not headlines, and make buyers show their assumptions.

Sizing a seller note without giving away the store

If 90% of buyers expect a seller note, the question isn’t whether to carry paper. It’s how much, and on what terms. A few working rules for the lower middle market: keep the note to 10–20% of the price unless you’re deliberately financing more for price or tax reasons. Charge a real interest rate, because this is credit you’re extending, not a favor. Keep the term to 5–7 years, with a maturity that doesn’t outlive your patience. If an SBA loan is in the deal, expect the lender to require standby provisions on your note, and understand what that does to your cash flow before you agree. And treat the note as at-risk capital: it sits behind the bank, so price the whole deal accordingly.

Earnouts in plain English

An earnout defers part of the price against future performance. Used well, it bridges a real disagreement about the future; used badly, it’s a discount wearing a disguise. Three questions expose which one you’re looking at: Is the metric something the seller can still influence after close? Is it measured the way the business already keeps its books? Is the ceiling worth the wait? If any answer is no, the earnout is doing something other than bridging.

What a Quality of Earnings actually checks

A QofE isn’t an audit. It asks a narrower, sharper question: are the earnings the seller claims the earnings a buyer would actually inherit? Add-backs get tested, one-time revenue gets stripped, owner expenses get normalized. For sellers, commissioning your own QofE before going to market turns diligence from an ambush into a checklist. For buyers, it’s the cheapest expensive-mistake insurance available.

Seeking: deal attorneys fluent in SBA-financed transactions for sub-$5M deals.

Quality of Earnings · Home Services · Midwest “Under LOI on a residential services business, $1–5M revenue. Seeking a QofE provider who works sub-$10M deals and can start within two weeks.”

Deal Structuring · First acquisition “Self-funded searcher with an accepted IOI. Want 30 minutes with someone who has personally structured an SBA deal with a seller note. What do I wish I knew?”

Analyst-track talent, meet the lower middle market

Search funds, independent sponsors, and M&A advisory shops hire from passion and proof, not just pedigree. Oppsheet Talent, coming soon, will let candidates list an anonymized profile (school, skills, target market; never your name until you connect) and let firms filter for exactly who they need. If you’re already in Claude polishing your resume, you’re one sentence from being findable.