Veterans Day and Veteran Owned Business Opportunities

Veteran-Owned Business? 7 Opportunities You May Be Overlooking

From government contracts and corporate customers to equipment and hiring help, these resources deserve a closer look.

You have customers to serve, bills to pay, and a business to keep moving. Researching veteran business programs may never make it to the top of the list.

Perhaps your website already says “veteran-owned.” Customers appreciate your service, and your reputation rests on the work you deliver. But there may be opportunities beyond that recognition: another route to customers, access to surplus equipment, or help finding employees.

The challenge is knowing which resources apply to your business—and which are worth your time.

National Veterans Small Business Week, November 9–13, 2026, offers a timely reason to look. Whether you are exploring business ownership or have operated a company for years, the resources below can help you identify a useful next step.

At a glance: What resources are available to veteran-owned businesses?

Eligible veteran-owned businesses can explore federal contracting certification, surplus property, corporate supplier programs, and procurement assistance. Other resources address specific needs, including VA self-employment support, disruption from military call-ups, and employee recruiting.

Each program has its own purpose and eligibility requirements. Several also serve businesses that are not veteran-owned.

Opportunity	Why explore it?	Where to start
Federal contracting certification	Pursue qualifying government contracts	SBA VetCert
Federal surplus property	Investigate equipment options	State Agency for Surplus Property
Corporate supplier programs	Reach private-sector business buyers	Target customers’ procurement teams
Contracting assistance	Prepare to sell to government	APEX Accelerators
VA self-employment support	Explore suitable self-employment with a service-connected disability	VA VR&E counselor
Military call-up assistance	Address eligible operating-expense shortfalls	SBA military reservist loan program
Veteran recruiting resources	Find and retain employees	Department of Labor employer resources

1. Veteran business certification: Know which contracts you can pursue

Being veteran-owned and being certified for a federal contracting program are separate matters.

The Small Business Administration administers Veteran Small Business Certification, commonly called VetCert. Two designations have different contracting reach:

Designation	Veteran-specific contracting opportunities
Veteran-Owned Small Business (VOSB)	Qualifying VA set-aside and sole-source opportunities under its Vets First program
Service-Disabled Veteran-Owned Small Business (SDVOSB)	Qualifying set-aside and sole-source opportunities across the federal government

A set-aside limits competition to qualifying businesses. A sole-source award may be made without a competitive bidding process when the applicable requirements are met.

Eligibility includes small business requirements and at least 51% qualifying veteran ownership and control. SDVOSB certification requires qualifying service-disabled veteran ownership and control. SBA certification is free.

Ownership percentage alone is not the whole test. An applicant’s actual management arrangements and governing documents also matter.

These certifications concern particular veteran contracting opportunities. Businesses may pursue other government work for which they qualify.

What to do: Identify agencies that buy your products or services, then review the applicable certification requirements. Start with the customer opportunity so the application supports a business goal.

Keep expectations practical: Certification establishes eligibility. Winning work still requires a suitable offer, competitive pricing, and the capacity to deliver.

2. Federal surplus equipment: Investigate an alternative to buying new

Equipment costs can delay a company’s next step. One less familiar resource involves property the federal government no longer needs.

Eligible certified veteran-owned small businesses may obtain federal surplus personal property through the state agencies administering the program.

Available property can cover a wide range of categories. Georgia’s program, for example, lists computers, furniture, vehicles, office equipment, and construction equipment. Actual inventory varies by state and over time.

Fees may apply. Recipients must follow business-use, recordkeeping, and transfer restrictions. SBA says property must be put into its intended use within one year, and disposal during the restriction period requires authorization.

A repair business considering an equipment purchase could investigate whether a suitable surplus item is available. The comparison should include its condition, transportation, repairs, and operating costs.

What to do: Prepare an equipment wish list. Ask your State Agency for Surplus Property about eligibility, inventory, fees, and restrictions before making a purchase elsewhere.

Practical takeaway: A low acquisition cost only helps if the equipment suits the work and remains economical to operate.

3. Corporate supplier programs: Look beyond government customers

Government agencies are not the only organizations that work with verified veteran-owned suppliers.

Private-sector certification programs, including the National Veteran Business Development Council (NVBDC), serve corporate supplier initiatives.

These credentials have a different purpose from federal VetCert certification. Private certification does not substitute for SBA certification for federal veteran set-aside and sole-source opportunities.

For a company selling maintenance, technology, professional services, or business supplies, a corporate purchasing department may be worth investigating.

Start with the prospective buyer. Determine whether it recognizes veteran business credentials and is purchasing the category you provide.

What to do: Choose five companies you would like to supply. Ask their procurement teams:

Which veteran business certifications do you recognize?
How do new suppliers register?
Are you seeking suppliers in our category?
What experience, insurance, and delivery capacity do you require?

Confirm current certification costs and requirements directly with the certifier before applying.

Registration can introduce your business to a purchasing process. Follow-through still matters: understand the buyer’s needs, respond to suitable opportunities, and explain why your company can perform the work.

4. Government contracting assistance: Get ready before you bid

An experienced business owner can still be new to government purchasing.

Registrations, solicitations, documentation, and performance requirements can make an otherwise familiar service feel complicated.

APEX Accelerators provide assistance with government contracting. Their services include counseling, training, help identifying bid opportunities, and guidance on contract requirements. GSA describes these services as including no-cost assistance.

A useful first conversation addresses readiness:

Can your business deliver the required volume?
Do you understand the solicitation and its deadlines?
Can you document relevant experience?
Have you accounted for all performance costs?
Can you fund the work while awaiting payment?

The VA’s Office of Small and Disadvantaged Business Utilization also offers business readiness resources, small business liaisons, and Direct Access Program events.

These resources can help an owner understand purchasing needs before committing time to an unsuitable bid.

What to do: Ask an APEX counselor to assess readiness and help identify potential buyers. Bring a short description of your services, completed projects, staffing, capacity, and geographic coverage.

For example, an established cleaning company might investigate a manageable local opportunity before pursuing work requiring a substantial increase in staffing. The goal is a contract the business can perform profitably.

5. VA self-employment support: A specific pathway for eligible veterans

For some veterans, self-employment may provide a route to suitable work that accommodates a service-connected disability.

The VA’s Veteran Readiness and Employment (VR&E) Self-Employment track can provide:

Analysis of a proposed business concept.
Assistance developing a business plan.
Training in business operations, marketing, and finances.
Guidance on resources needed to implement the plan.

This pathway has specific requirements involving service-connected disability, employment barriers, and VR&E enrollment. A counselor works with the participant, and VA evaluates whether self-employment and the proposed business are viable.

A disability rating alone does not establish entitlement to this track. It serves an individualized employment purpose rather than providing a general expansion program for existing companies.

What to do: If these circumstances may apply, review VR&E eligibility and discuss self-employment with a VA Vocational Rehabilitation Counselor.

6. Military reservist loans: Help with eligible operating expenses

An essential employee’s military activation can affect far more than scheduling.

A small company may temporarily lose a critical technical skill or operational role while rent, insurance, and other ordinary expenses continue.

The SBA’s Military Reservist Economic Injury Disaster Loan (MREIDL) program addresses eligible economic injury when an essential reservist employee is ordered to active service. SBA’s October 2026 notice specifies service of more than 30 consecutive days.

Loans can help cover ordinary and necessary operating expenses the business cannot meet because of the activation. Eligibility and the amount available depend on the company’s circumstances and economic injury. Businesses with sufficient financial capacity may not qualify.

The program does not cover lost income or profits, refinance long-term debt, or finance expansion. It is also available to qualifying businesses beyond the veteran-owned business community.

What to do: Review the program promptly if an essential reservist employee receives a call-up notice. SBA’s published filing window generally begins with notice of expected call-up and ends one year after discharge or release from active duty.

Maintain a continuity plan as well. Document critical procedures, identify backup coverage, and determine which responsibilities require cross-training.

7. Veteran hiring resources: Find support for building your team

An established business may need employees more urgently than startup advice.

The Department of Labor’s Veterans’ Employment and Training Service connects employers with resources for finding, hiring, and retaining veterans and military spouses.

Its Regional Veterans’ Employment Coordinators help employers develop hiring initiatives and connect with federal, state, and local resources.

Employers can also explore the HIRE Vets Medallion Award, which recognizes qualifying commitments to veteran recruitment, employment, and professional development. This recognition is separate from veteran-owned business certification and is not restricted to veteran-owned employers.

What to do: Describe the job through its actual responsibilities, required skills, schedule, and training expectations. Then ask DOL’s employer resources for help connecting with appropriate recruiting channels.

Plan for retention, too. Clear expectations, useful training, and opportunities to advance help employees build a future with the company.

Where should a veteran business owner start?

Choose one business need before choosing a program.

A company seeking customers might investigate government procurement or corporate supplier programs. An owner facing equipment costs could contact the surplus property agency. A growing employer may get more immediate value from recruiting assistance.

Veterans Business Outreach Centers (VBOCs) can also help eligible members of the military community with entrepreneurial development, including starting and growing businesses.

Before spending money or submitting an application:

Confirm the fit. Determine whether the opportunity addresses a current business need.
Check eligibility. Ownership, control, disability status, employment circumstances, and location may matter differently across programs.
Gather the requested records. Follow the program’s document checklist.
Confirm current terms. Ask about costs, timelines, availability, and ongoing obligations.
Schedule one action. Arrange a counseling session, speak with a buyer, or request an eligibility review.

Frequently asked questions about veteran-owned business resources

What qualifies a business for SBA veteran-owned certification?

SBA requirements include small business status and at least 51% qualifying veteran ownership and control. SDVOSB certification has additional service-disabled veteran requirements. Applicants must satisfy the complete program rules.

Does forming an LLC make it a certified veteran-owned business?

No. Business formation and program certification are separate processes. VetCert requires its own application and eligibility review.

Is federal certification the same as corporate certification?

No. Federal VetCert and private-sector credentials serve different programs. Ask your intended customer which certification applies before pursuing it.

Does veteran status guarantee a business grant?

No. SBA states that it does not provide grants for starting or expanding a business. Specialized programs and private competitions have their own terms; veteran status alone does not guarantee funding.

Can an established veteran-owned business use these resources?

Several opportunities discussed here concern procurement, equipment, hiring, and ongoing operations. Established businesses should review the specific requirements rather than assume assistance is limited to startups.

VR&E self-employment support serves a more specific employment purpose.

Turn recognition into a practical next step

Running a business leaves little spare time for researching programs. A useful opportunity can remain unexplored long after an owner first hears about it.

You do not need to pursue all seven. Start with one need that matters now: reaching a buyer, obtaining equipment, hiring an employee, or protecting operations.

Your service is already part of your business’s story. Understanding the resources available may help you write its next chapter.

Official resources

Program information reviewed November 9, 2026. Confirm current requirements with the administering organization before applying.

Democrats Win the House and Senate. What Could It Mean for Your Small Business?

What could this political shift mean for the cost of doing business?

The midterm results put affordability, healthcare, tariffs, and business costs back at the center of Washington’s agenda. Here’s what owners should watch.

Updated November 6, 2026

The midterm elections delivered a decisive shift in Washington.

Democrats have won control of both the U.S. House of Representatives and the Senate, according to election projections. The final margins may change as remaining races are counted, but the result gives Democrats a stronger position in Congress when its new session begins in January 2027. apnews.com

For small business owners, the immediate question is whether that shift will affect the pressures they face every day: the cost of products and materials, health insurance, hiring, financing, and finding customers who are willing to spend.

Democratic leaders have identified healthcare costs and tariffs as early priorities. At the same time, President Donald Trump remains in the White House, and most major legislation will require negotiation before it can become law. abcnews.com

What do the 2026 midterm results mean for small businesses? Democrats’ projected control of the House and Senate gives the party more power to advance proposals and scrutinize federal policy. Healthcare affordability, tariffs, taxes, and government spending are among the issues owners should watch. Existing laws and tariffs remain in place unless changed through the appropriate legal process.

At a Glance

Democrats are projected to control both chambers of Congress. The new Congress takes office in January 2027.
Healthcare affordability and tariffs are expected to be early priorities.
The Senate has significant influence over legislation and many presidential appointments.
A Democratic majority does not guarantee that every proposal will become law. Senate rules and the president’s veto remain important.
Current taxes, tariffs, and regulations remain in effect unless they are changed.
Small business owners should watch specific proposals, especially those affecting costs, coverage, financing, and customer spending.

Why the Size of the Democratic Victory Matters

Winning one chamber would have given Democrats leverage. Winning both gives them more control over what happens on Capitol Hill.

Beginning with the new Congress, Democratic leaders will be able to bring their priorities forward in the House, set the Senate’s agenda, lead committees in both chambers, and hold hearings on administration policies.

That matters even when a proposal faces an uphill climb. Hearings can bring attention to business concerns. Votes can put lawmakers on record. Negotiations over spending and other necessary legislation can give both parties opportunities to seek changes.

The Senate majority is particularly important because the chamber also votes on many presidential nominees, including federal judges and senior agency officials. Democratic senators can influence which nominees move forward and which agencies receive close scrutiny.

The practical effect: Business owners should expect more debate—and potentially more pressure for action—on the issues Democrats emphasized during the campaign.

What Democrats Can Do—and What Still Requires Agreement

Democrats’ new position	What it could mean
Control committees in both chambers	More hearings and oversight of administration policies and agencies.
Set the legislative agenda	Greater opportunity to introduce and advance bills on healthcare, tariffs, and other priorities.
Hold a Senate majority	More influence over presidential nominations and which bills reach the Senate floor.
Negotiate federal spending	A stronger voice in funding decisions, though agreements will still require cooperation.
Pass legislation	Bills generally must clear both chambers and be signed by the president, unless a veto is overridden.

Most Senate legislation also needs 60 votes to end debate, although there are exceptions. A bill that passes both chambers can still be vetoed by the president. www.abc.net.au

Key takeaway: Democrats have gained substantial power to advance their priorities and challenge the administration. Turning those priorities into law will still require political agreement.

Could a Democratic Congress Lower Healthcare Costs for Small Business Owners?

Healthcare was one of the issues voters heard about throughout the campaign, and Democratic leaders have said they intend to pursue lower costs and restored coverage assistance.

Senate Democratic leader Chuck Schumer has also identified housing, tariffs, childcare, and energy bills as issues the party intends to address as part of its focus on affordability. apnews.com

One healthcare priority is the enhanced Affordable Care Act marketplace premium assistance that expired at the end of 2025. Democratic leaders have said they want to restore it, but the details, funding, and prospects for agreement remain uncertain. abcnews.com

For small businesses, the issue reaches beyond companies that offer group insurance.

A self-employed consultant may buy coverage through an individual marketplace. An employee at a small firm may do the same. Someone considering leaving a job to start a business may be weighing whether individual coverage is affordable.

Potential benefit

If lawmakers agree on premium assistance, eligible business owners and workers purchasing marketplace coverage could see relief.

Potential drawback or limitation

A marketplace subsidy would not automatically lower premiums for every small employer’s group plan. Until legislation is enacted, owners cannot know the final terms or who would qualify.

Example: A freelance designer buying her own insurance may be directly affected by a change to marketplace assistance. A small construction company offering a group plan would need to review whether any final legislation addresses its coverage costs.

What to watch: Specific legislation, eligibility requirements, and effective dates—not just promises to lower healthcare costs.

Will Tariffs Change After Democrats Won the House and Senate?

Tariffs are another area where the new House and Senate could take a more active role.

Democratic leaders have indicated they will challenge the administration’s tariff policies, including through hearings and proposed legislation. Their argument is that tariffs can raise costs for businesses and consumers. Supporters of tariffs argue that they can protect domestic industries or strengthen the country’s negotiating position on trade. abcnews.com

A small business does not have to import goods directly to be affected. Tariff-related costs can move through a supply chain and appear in the price of inventory, equipment, materials, or packaging.

Potential benefit

Greater congressional attention could put pressure on the administration to address costs facing importers and the businesses that buy from them. Certain proposals could seek to reduce or remove duties.

Potential drawback or limitation

No tariff disappeared on Election Day. The president retains significant authority over trade, and legislation he opposes could face a veto.

Businesses also experience tariffs differently. A retailer may want lower import costs, while a U.S. manufacturer competing with imported goods may value the protection a tariff provides.

Example: An independent store selling imported home goods might benefit if its landed costs fall. A domestic producer of similar goods might face more competition if imported products become cheaper.

What to watch: Actual tariff actions, exclusions, and supplier pricing—not just a bill’s introduction.

For additional ways to evaluate supplier and inventory exposure, see Navigating Tariffs: Strategies for Small Businesses. That article was published in 2025; check current guidance before relying on any specific tariff information.

Could Small Business Taxes Change After the Midterm Elections?

A decisive congressional victory gives Democrats more room to bring tax proposals forward. It does not automatically change the taxes small businesses pay.

Major tax legislation generally requires the House, Senate, and president to reach an agreement. That could limit sweeping changes in either direction, while also making it harder to pass targeted relief.

For many owners, one current provision is especially relevant: the qualified business income deduction, commonly called the 20% pass-through deduction.

The 2025 tax law made the deduction permanent under current law, meaning it has no scheduled expiration. Congress can still change it through future legislation, and eligibility rules and limitations apply. The deduction is worth up to 20% of qualified business income; it is not a guaranteed 20% reduction in the owner’s tax bill. www.everycrsreport.com

Potential benefit

A stronger focus on affordability could produce proposals aimed at helping small businesses or their customers. Divided government may also make abrupt, sweeping tax changes more difficult.

Potential drawback

If the parties cannot agree, business owners may face prolonged uncertainty about proposals without receiving the clarity or relief they want.

What to do now: Keep planning under current law. Before changing your business structure or making a major purchase in response to a tax proposal, discuss it with your tax professional.

For a closer look at eligibility, read Your LLC or Side Business Could Qualify for a 20% Tax Deduction.

Government Spending: More Negotiating Power—and a Risk of Standoffs

Control of the House and Senate gives Democrats a stronger position in federal spending negotiations. That can affect agency budgets, small-business programs, federal contracts, and the priorities attached to funding bills.

The president and Congress still need to agree on funding. If negotiations break down, parts of the federal government can shut down when existing funding expires.

That matters to more than large government contractors. A small maintenance company, consultant, supplier, or subcontractor may rely on federal work or on a customer whose business depends on government operations.

What happens before January?

The current Congress remains in office during the transition and continues to handle federal business, including upcoming funding decisions. The newly elected House and Senate take office in January 2027.

The election can therefore influence negotiations now, even though the new majorities have not yet taken their seats. www.investing.com

Potential benefit

Democrats can push to protect or expand programs they consider important, while Republicans and the administration can press their own priorities. Negotiations may produce agreements that neither side could achieve alone.

Potential drawback

A funding dispute can delay agency activity and create uncertainty for businesses. The effects of any shutdown would depend on which agencies and activities are affected, as well as the terms of individual contracts.

What to do now: If federal work represents a meaningful share of your revenue, review your contracts, payment schedules, and cash reserves. Stay in touch with the agency or prime contractor responsible for the work.

Hiring and Regulations: Possible Protections, Possible Costs

A Democratic House and Senate may bring more attention to worker protections, wages, benefits, competition, and consumer issues.

Those discussions can produce benefits and costs that fall differently across businesses.

An employer struggling to retain workers may welcome policies that make healthcare more affordable or improve access to training. A small company facing additional reporting or benefit requirements may be concerned about the time and cost of compliance.

Similarly, a small seller may welcome greater scrutiny of a dominant platform’s practices, while another company may worry about the burden of a new rule.

The distinction: A hearing, campaign promise, or introduced bill does not itself create a new requirement. Owners need to watch what is actually enacted or finalized and when it takes effect.

Interest Rates and Lending: The Election Is Only Part of the Picture

Small business owners hoping for cheaper financing should keep one point in mind: Congress does not directly set the interest rate on a business loan.

The Federal Reserve sets monetary policy independently, considering inflation, employment, and other economic conditions. Lenders also consider their own costs, credit standards, loan terms, and a borrower’s financial situation.

The new Congress can influence the environment through spending, debt negotiations, and funding for federal lending programs. But a change in congressional control does not guarantee that rates will rise or fall.

What to do now: If you are considering a loan, compare offers and ask how different rates would affect your monthly payment. If you already have variable-rate debt, review how much your payment could change.

Why Did Stocks Fall After the Midterm Elections?

The market’s reaction to the midterm elections has been far from straightforward.

Stocks rose on Wednesday, November 4, but reversed sharply on Thursday, November 5, as technology and AI-related shares led a broad selloff. Investors were weighing several issues at once, including the election’s potential policy implications and concerns about the returns companies may earn from their spending on artificial intelligence. apnews.com

The volatility shows why a single day’s market reaction is a poor guide to where stocks—or the economy—will go next.

Some investors may see divided government as a constraint on major policy shifts. Others may focus on possible fights over spending, tariffs, regulation, or particular industries.

For small business owners, the connection may be personal—through retirement savings—or indirect, through customer confidence and spending.

What to watch: The broader economy, including inflation, borrowing costs, consumer demand, and company earnings. The election is one factor among many, not a reliable signal to buy or sell.

What Could This Mean for Your Business?

If your business depends on…	Watch for…	Possible effect
Imported products or materials	Tariff proposals, exclusions, and supplier pricing	Costs could change if policy or supplier prices change.
Marketplace health coverage	Proposals involving premium assistance	Eligible owners or workers could benefit if assistance is enacted.
Employees	Wage, benefit, and workforce proposals	Changes could affect hiring, retention, or compliance costs.
Business loans	Federal Reserve decisions and lender terms	Financing costs may change with broader conditions.
Federal contracts	Funding negotiations and agency notices	Disputes could affect agency operations or contract timing.
Consumer spending	Inflation, employment, and household confidence	Customers may adjust spending as their finances change.

What Could Change First After the Midterm Elections?

Time frame	What small business owners may see	What it means
Now through the end of 2026	Statements from party leaders, market reactions, and negotiations in the current Congress	Pay attention to developments, but continue operating under existing laws and rules.
Beginning in January 2027	New congressional leaders and committees set their agendas	Expect more hearings and proposals on issues such as healthcare, tariffs, and affordability.
As proposals move forward	Bills may be introduced, revised, negotiated, or blocked	Review the details before assuming a proposal will affect your business.
If a law or rule is finalized	Agencies publish guidance, requirements, and effective dates	Determine whether it applies to you and when you need to act.

Remember: A proposal, a vote, and a signed law are different stages. A headline may arrive long before any change reaches your business.

Five Steps Small Business Owners Can Take Now

You do not need to predict every decision Washington will make to prepare your business.

1. Identify your biggest cost pressures

Review inventory, materials, insurance, payroll, rent, and debt payments. The national debate matters most where it intersects with your actual expenses.

2. Talk to suppliers

Ask whether tariffs or other policy changes affect their pricing. If you rely heavily on one source, consider what alternatives are available.

3. Review healthcare renewal dates

Know when your coverage renews and which decisions you need to make. Follow proposals, but do not budget for a benefit until it is enacted and you know whether you qualify.

4. Test your cash flow

Consider how your business would handle a price increase, delayed customer payment, or slower sales. A forecast gives you time to respond.

If rising costs or late payments are putting pressure on your business, see The Small Business Cash Flow Trap.

5. Separate proposals from actual changes

When you see a headline, ask: Was a bill introduced, passed by one chamber, passed by both chambers, or signed into law? Those are different stages.

Frequently Asked Questions

Did Democrats win both Congress and the Senate?

The Senate is part of Congress. Congress has two chambers: the House of Representatives and the Senate. Democrats are projected to control both when the new Congress takes office in January 2027.

Does winning both chambers mean Democrats can pass any law they want?

No. Most legislation must pass both chambers and be signed by the president. Many Senate bills also face a 60-vote hurdle to end debate. Congress can override a presidential veto, but doing so requires a two-thirds vote in each chamber.

Did small business taxes change because of the election?

No. The election itself did not change federal tax law. Future changes would need to go through the legislative process.

Will the 20% small business deduction disappear?

It remains in current law for eligible taxpayers. The 2025 tax law removed its scheduled expiration, although Congress can change tax law in the future. Eligibility and limitations still apply. www.everycrsreport.com

Will tariffs be removed?

Not automatically. Democrats are expected to challenge some tariffs, but existing duties remain in effect unless they are changed through an applicable legal process.

Will healthcare premiums go down?

That is not yet known. Democratic leaders have identified healthcare affordability as a priority, but any savings would depend on what becomes law and who qualifies.

Will the election lower business loan rates?

Not automatically. The Federal Reserve sets monetary policy independently, and lenders determine loan terms based on several factors.

A New Balance of Power—and a New Set of Business Questions

The election gives Democrats a stronger voice in Washington and an opportunity to put their priorities before the House and Senate. Healthcare, tariffs, and affordability are likely to be central to that effort.

For small business owners, the effect will depend on what happens next. A proposal that helps one company manage costs may present a different challenge for another. Some ideas may become law; others may stall or change during negotiation.

The best position for an owner is to know where the business is exposed, follow developments that matter to those costs, and be ready to act when a proposal becomes a concrete change.

Joe Buck and Troy Aikman Face an Uncertain Future and What That Tells Us About Partnerships.

What Happens When a Business Partnership Ends? Joe Buck and Troy Aikman Face an Uncertain Future.

A familiar broadcasting duo raises a question small-business owners should ask: What happens when two people stop moving toward the same future?

The headlines surrounding Joe Buck and Troy Aikman have put the future of a familiar broadcasting partnership in question.

Reuters reported that Aikman expects to become a free agent after the season, while Buck has signed an extension with ESPN. Reports of tension have fueled speculation about their future together, but a completed split should not be treated as confirmed. www.reuters.com

Their situation involves broadcasting colleagues with separate employment contracts. For people who jointly own a business, separating introduces another set of questions.

Who keeps the company? What is an owner’s share worth? Who takes responsibility for outstanding debts? Can either person continue serving the same customers?

Even when both owners agree that it is time to separate, agreeing on how can be difficult.

A partnership can reach its end before the business does. The process is deciding what happens to both.

At a glance: What happens when business partners separate?

The available options depend on the business structure, governing agreements, financial circumstances, and applicable state law.

Common paths include:

One owner buying the other’s ownership interest.
An approved sale of an ownership interest to someone else.
Selling the entire business.
Negotiating a different ownership or management arrangement.
Winding down and dissolving the company.

Before moving forward, owners need to understand their rights, establish the company’s financial position, and determine how operations and obligations will be handled during the transition.

Throughout this article, “business partners” refers broadly to co-owners. The legal rules differ for partnerships, LLCs, and corporations.

1. Start with the agreement that governs the business

The first step is reviewing the documents that define the relationship between the owners.

For an LLC, that generally includes the operating agreement. A partnership may have a partnership agreement. A corporation may have shareholder agreements, bylaws, and separate buy-sell provisions.

These documents may address:

Issue	What to look for
Departure	Required notice and events that trigger an exit process
Ownership transfers	Restrictions, approvals, and purchase rights
Valuation	A formula, appraisal process, or other method
Buyout payments	Timing, financing, and conditions
Decision-making	Voting requirements and authority
Disagreements	Mediation, arbitration, or other dispute procedures

The SBA identifies ownership, voting rights, management duties, and buyout provisions among the subjects an LLC operating agreement can address. SBA: Basic Information About Operating Agreements

An agreement may provide a clear path. It may also leave important questions unanswered. Where documents are missing or silent, applicable state law becomes especially important.

Wanting to leave does not automatically establish a right to an immediate buyout at a price the departing owner chooses.

2. Decide how the business will operate during the separation

A disagreement between owners does not pause payroll, customer commitments, rent, or loan payments.

Before negotiating the final outcome, establish how essential decisions will be made.

That may include an interim arrangement covering spending approvals, customer communication, access to financial records, and responsibility for ongoing work.

Owners should seek legal guidance before changing account access, moving company funds, redirecting customers, or making commitments outside their authority. Actions taken during a dispute can affect both the business and the eventual resolution.

The immediate goal is to keep necessary operations moving while the owners evaluate their options.

3. Establish what the business owns—and owes

A useful separation discussion needs reliable financial information.

A bank balance alone will not show the company’s full position. Owners may need to review:

Cash, receivables, and unpaid bills.
Equipment, inventory, and other assets.
Loans, leases, and personal guarantees.
Tax obligations and outstanding filings.
Customer contracts, deposits, and unfinished work.
Ownership of intellectual property and digital assets.

This review can reveal obligations that affect the value of the company or limit the available exit options.

For example, equipment may have resale value but also carry debt. A customer deposit may sit in the bank while representing work the company still owes.

Before discussing how to divide the value, establish what value is actually available.

4. Agree on how an ownership interest will be valued

“How much is my share worth?” is often the hardest question.

The answer may depend on an existing contractual formula or a negotiated valuation process. Where appropriate, owners may use an independent business valuation professional.

Relevant considerations can include earnings, assets, liabilities, customer concentration, and how dependent the business is on a departing owner.

An ownership percentage does not, by itself, settle the purchase price. Nor is an owner’s original contribution necessarily the amount they receive when leaving.

The transaction also matters. Selling an ownership interest and selling the company’s assets can produce different legal, financial, and tax consequences.

Agreeing on the valuation method early can help keep negotiations focused on a shared process.

5. Choose a workable exit path

The preferred outcome must also be financially and legally achievable.

Exit path	Questions to resolve
One owner buys out another	Can the buyer fund the purchase? What approvals are required?
An outside buyer purchases an interest	Do transfer restrictions apply? Will the remaining owners accept the arrangement?
The entire business is sold	Do the owners agree on timing, price, and transaction terms?
Ownership or management is restructured	Can revised responsibilities resolve the problem?
The business closes	How will work, creditors, taxes, and remaining assets be handled?

A buyout may involve an upfront payment, financing, or installments. Each approach creates different risks and obligations.

An installment arrangement, for example, means the departing owner may remain financially connected to the business after giving up ownership. Payment protections and default provisions deserve careful review.

6. Resolve debts, guarantees, contracts, and taxes

An agreement between owners does not necessarily change obligations owed to someone else.

If an owner personally guaranteed a loan or lease, transferring their ownership interest does not automatically release that guarantee. Any release must be addressed with the relevant creditor.

Contracts may also contain consent requirements or provisions triggered by a change in ownership.

Tax consequences depend on the entity, its tax classification, and the transaction. A business taxed as a partnership has different reporting considerations from a corporation. The IRS provides an overview of partnership taxation and reporting in Publication 541.

Owners should involve legal and tax advisers before finalizing the structure and price of the deal.

7. Document the separation and complete the handover

A verbal agreement to “go our separate ways” leaves too much unresolved.

The final documents should address the agreed transaction, payment terms, effective dates, responsibilities, and any continuing obligations.

The practical handover deserves equal attention:

Banking and signing authority.
Website, domain, email, and software administration.
Customer and supplier communication.
Business records and company property.
Required government filings and ownership records.
Insurance and professional licensing implications.

Some contracts, licenses, and accounts may require consent, reapplication, or other steps rather than a simple transfer.

The separation is complete when the agreed legal, financial, and operational steps have been carried out.

If the business is closing, plan the wind-down

Closing a business involves more than stopping work.

Depending on the circumstances, the process may include collecting receivables, completing or resolving customer commitments, paying creditors, addressing employees, filing final tax returns, and submitting dissolution documents.

Remaining assets generally need to be handled after applicable obligations have been addressed.

Simply abandoning an entity can leave filings, fees, or other responsibilities unresolved. The SBA’s guide to closing or selling a business provides a starting point for planning.

What owners can do before a disagreement develops

The best time to establish an exit process is while everyone can discuss it calmly.

Before launching—or while the relationship is working well—address these questions:

What happens if an owner wants to leave?

How will the ownership interest be valued?

Who may buy it, and how would the purchase be funded?

What happens if the owners cannot agree on a major decision?

How will death, disability, or an inability to contribute be handled?

Review those arrangements as the business grows. A structure that suited a weekend venture may need updating once the company supports employees, larger contracts, and multiple households.

Frequently asked questions

Can one owner force another to buy them out?

There is no universal right to demand a buyout. Available rights and remedies depend on the governing agreements, business structure, facts, and state law.

Does a 50/50 split make separation harder?

Equal ownership can create a deadlock when owners disagree and have no effective resolution process. The governing documents should address how unresolved decisions will be handled.

Can an owner leave but keep their ownership interest?

That may be possible, but leaving day-to-day work and giving up ownership are separate matters. Agreements and applicable law determine the rights and obligations involved.

What if there is no written agreement?

Owners should obtain legal advice about the rules that apply and the options available. The absence of a written agreement does not mean there are no enforceable rights or obligations.

The working relationship may end. The obligations need a plan.

The Buck–Aikman headlines draw attention because audiences become accustomed to successful people working together. A possible separation raises questions about what comes next.

For business co-owners, answering that question requires a process: review the agreements, establish the financial facts, evaluate the options, and document the outcome.

Friendship makes starting feel easy. A clear agreement helps everyone understand how to move forward—even when moving forward means separating.

MyUSACorporation helps entrepreneurs with business formation and related filings, including certain changes and dissolution services. Owners considering a separation should coordinate the required filings with legal and tax advice appropriate to their situation.

This article provides general information, not legal, tax, or valuation advice. Requirements and available options depend on the business structure, agreements, circumstances, and applicable law.

Your LLC or Side Business Could Qualify for a 20% Tax Deduction

Your LLC or Side Business Could Qualify for a 20% Tax Deduction. Here’s What Changed for 2026.

Weekend services, freelance work, and online shops may qualify. Here’s how the deduction works—and why your regular paycheck can affect the calculation.

You finish your shift, come home, and start working again—this time for yourself.

Maybe you build websites, sell handmade products, maintain lawns, or take photography bookings on weekends. The money might cover household bills. The business might be something you eventually want to do full time.

Calling it a “side business” does not make it less of a business for tax purposes.

Eligible owners can claim the qualified business income deduction, commonly called QBI or Section 199A. It generally allows a deduction of up to 20% of qualifying business income, subject to limits. Sole proprietors and owners of qualifying pass-through businesses can benefit.

The deduction is now permanent under current law, and changes taking effect in 2026 give smaller active businesses another reason to review their eligibility before filing.

At a glance

Question	Quick answer
Can a side business qualify?	Yes. Working part time does not automatically disqualify a qualifying business.
Do I need an LLC?	No. Eligible sole proprietors can claim QBI too.
How much can I deduct?	Generally up to 20% of qualified business income, subject to applicable limits.
What changed?	The scheduled expiration was removed, a minimum deduction was added, and certain phase-in ranges were expanded.
What is the new minimum?	A $400 deduction for eligible taxpayers with at least $1,000 in aggregate QBI from active qualified businesses.
Is that a $400 refund?	No. A deduction reduces taxable income; the savings depend on your tax situation.

The minimum deduction and expanded phase-in ranges apply to tax years beginning after December 31, 2025. For calendar-year taxpayers, that means the 2026 return generally filed in 2027.

Your business does not have to replace your regular job

A cleaning service operated on Saturdays, an online shop managed after work, or a freelance business with a handful of clients may qualify.

What matters is whether the activity is a qualifying trade or business and whether the owner meets the applicable tax requirements.

Employee wages do not qualify as business income for this deduction. Keeping your regular job, however, does not automatically prevent a separate business from qualifying. Income earned through a C corporation is also excluded.

That makes QBI relevant to people who are building a business gradually, without giving up the stability of a paycheck.

What changed for 2026?

The 20% deduction is not new. It has been available for tax years beginning after 2017.

The newer story is what the legislation enacted July 4, 2025, changed.

The deduction’s scheduled expiration was removed

QBI had been scheduled to expire after 2025. The law made it permanent under current law.

For eligible owners, that means the deduction continues beyond its original expiration date. It does not mean the rules can never change again.

Certain active owners can qualify for a $400 minimum deduction

Beginning in 2026, eligible taxpayers with at least $1,000 in aggregate QBI from active qualified trades or businesses can qualify for a minimum $400 deduction.

An active qualified business is one in which the taxpayer materially participates under the applicable tax rules. Simply owning a business does not establish material participation.

The $400 is a minimum—not an extra amount automatically added to the normal deduction. It also applies at the taxpayer level, rather than separately to every business.

Material participation is a condition of this new minimum. It is not a blanket requirement for the ordinary QBI deduction.

If the entire $400 deduction offsets income otherwise taxed at 22%, the federal income tax savings would be approximately $88.

The phase-in ranges for higher-income restrictions expanded

Additional restrictions begin applying above certain taxable income thresholds. The 2025 law expanded the ranges over which these restrictions phase in.

For 2026:

Filing status	Restrictions begin phasing in above	Phase-in range
Single, head of household, and most other returns	$201,750	$75,000
Married filing jointly	$403,500	$150,000
Married filing separately	$201,775	$75,000

These figures concern taxable income before the QBI deduction—not business sales or side business profit alone.

Crossing a threshold does not automatically eliminate the deduction. The outcome depends on factors including the type of business, wages it pays, and qualifying property it holds.

What could the deduction mean for a side business?

Consider a hypothetical owner with $20,000 in qualified business income from a weekend service business.

Assuming the owner qualifies and no applicable limits reduce the deduction:

Item	Illustrative amount
Qualified business income	$20,000
QBI deduction at 20%	$4,000
Federal income tax savings if the entire deduction offsets income taxed at 22%	$880

The $4,000 is the deduction. The $880 is the illustrative tax savings.

This example starts with qualified business income after applicable adjustments. It does not assume that $20,000 in customer payments automatically produces a $4,000 deduction.

QBI generally reflects qualifying income after business expenses and other applicable adjustments. The deductible portion of self-employment tax, self-employed health insurance deductions, and certain retirement contributions can affect the calculation.

Key takeaway: Calculate the benefit from qualified income, not gross sales. A business’s receipts, net profit, and QBI can be different numbers.

Why “up to 20%” matters

The ordinary deduction is generally subject to an overall limit of 20% of taxable income before the QBI deduction, minus net capital gain. Business losses and other restrictions can also affect the result.

For eligible active owners, the new minimum deduction can provide a $400 floor when the otherwise calculated deduction is smaller.

This is why multiplying business profit by 20% is a starting estimate rather than a complete tax calculation.

Do you need an LLC to claim QBI?

No. A qualifying sole proprietor can claim the deduction without forming an LLC.

An LLC’s federal tax treatment matters. A single-member LLC is generally disregarded as separate from its owner for federal income tax purposes unless it elects another treatment. An LLC with multiple members is generally treated as a partnership unless it elects corporate treatment.

Forming an LLC does not automatically make income eligible for QBI. Likewise, electing S corporation treatment does not guarantee a larger deduction. For example, reasonable compensation paid to an S corporation owner is excluded from QBI.

A structure decision should consider ownership, liability concerns, state requirements, administrative costs, and the overall tax picture.

Pro tip: Before changing your business’s tax treatment, ask your tax professional to compare the total cost—including taxes, payroll, and filing requirements.

Is your side activity a business or a hobby?

Selling something occasionally does not automatically establish a business. Enjoying what you do does not automatically make it a hobby, either.

The IRS considers several factors, including whether you operate in a businesslike manner, maintain records, devote time and effort to profitability, and change methods to improve results. No single factor decides the outcome.

Someone who occasionally sells a craft project may have a different tax situation from someone who sets prices, markets products, tracks expenses, and works consistently toward a profit.

Useful habits include:

Recording sales and expenses throughout the year.
Keeping receipts, invoices, and customer agreements.
Reviewing whether prices cover costs.
Documenting changes made to improve profitability.
Keeping business transactions easy to distinguish from personal spending.

A separate account can make recordkeeping easier, but no single practice establishes that an activity qualifies.

Your paycheck can affect the deduction—even though it does not qualify

For side business owners, this is an easy detail to overlook.

Your wages are excluded from QBI, but they can contribute to the taxable income used to determine whether additional restrictions apply. A spouse’s income can matter when filing jointly.

At higher incomes, certain service businesses—including consulting, law, and health services—face restrictions that can reduce or eliminate their deduction. Other businesses may face limits based on wages and qualifying property.

A small consulting business is not automatically excluded. But a modest side business profit does not guarantee the full deduction when the owner’s overall taxable income is high.

What to do before year-end

Get your records in order. Reconcile sales and expenses with bank statements, payment platforms, and invoices. Taxable business income must be reported even when no information return, such as a Form 1099, arrives.

Confirm how your business is taxed. Know whether you report as a sole proprietor, through a partnership, or under a corporate election.

Review your entire income picture. Your regular job and, when filing jointly, your spouse’s income may affect the calculation.

Ask about the new minimum. If you have a smaller active business, ask whether you meet the requirements for the $400 floor.

Request a QBI review. Bring your tax preparer a direct question: “Does my side business qualify, and which adjustments or limits affect my deduction?”

Frequently asked questions

Can I claim QBI while working full time?

Yes, if your separate business qualifies. Your employee wages are excluded from QBI, but they can affect the income thresholds used in the calculation.

Can I claim QBI if I take the standard deduction?

Yes. Eligible taxpayers can claim it whether they take the standard deduction or itemize.

Does QBI reduce self-employment tax?

No. It reduces federal taxable income for income tax purposes. It does not reduce the net earnings used to calculate self-employment tax.

Is the new $1,000 threshold based on sales?

No. It is based on aggregate qualified business income from active qualified businesses.

Do I receive $400 for each business?

No. The minimum applies at the taxpayer level. It is a deduction, not a payment or an additional deduction for each business.

When do I claim the 2026 changes?

Calendar-year taxpayers generally apply them on their 2026 federal income tax return filed in 2027. Different rules apply to the 2025 tax year.

What this means for your side business

Your side business may only operate after work or on weekends, but its income still deserves careful attention.

Before filing your 2026 return, bring your income and expense records to your tax preparer and ask two questions: Does this business qualify for QBI, and does the new minimum deduction apply?

You put time into earning that money. Understanding the deduction helps you avoid paying more federal income tax than you owe.

Official resources

This article provides general information about federal tax rules as of October 12, 2026. Eligibility and savings depend on individual circumstances. MyUSACorporation provides business document preparation and filing services, not tax or legal advice.

The SBA Just Changed the Rules For Buying a Small Business

Thinking About Buying a Business? The SBA Just Changed the Rules

New SBA business-acquisition rules took effect October 1, 2026. If buying an existing business is part of your entrepreneurial plan, here’s what changed—and what you should know before making an offer.

Starting a business from scratch isn’t the only way to become a business owner.

Every day, established businesses with customers, employees, equipment, revenue and years of operating history are put up for sale. And as more longtime business owners approach retirement, buying an existing company could become an increasingly important path into entrepreneurship.

But there’s another part of the equation:

How do you pay for it?

For many buyers, an SBA-backed loan is one possible answer.

On October 1, 2026, the U.S. Small Business Administration’s SOP 50 10 8.1 took effect, including a new Appendix 15 dedicated specifically to 7(a) change-of-ownership transactions.

If you’re considering buying a business, expanding by acquiring another company or buying out an existing owner, the new framework is worth understanding before you structure the deal.

At a Glance

The SBA hasn’t made business acquisitions impossible. It has created a more defined framework for evaluating and financing them.

What’s Important	What It Could Mean for a Buyer
Four defined acquisition categories	Requirements depend partly on the type of ownership transaction
10% equity requirement for an Initial Acquisition	A typical outside buyer generally needs meaningful equity in the transaction
Historical cash flow matters	Future growth projections generally can’t rescue an acquisition that fails the required historical debt-service test
Business valuation requirements	The asking price and supported business value may not be the same
Quality of Earnings review for certain $3M+ purchases	Larger Initial Acquisitions and Business Expansions can face substantially more financial due diligence
7(a) Small and SBA Express remain available	The September technical update expressly permits them for qualifying change-of-ownership transactions, subject to Appendix 15

The bigger takeaway: Don’t find a business, negotiate the entire deal and only then ask whether SBA financing works.

Understanding the financing structure earlier could prevent an expensive surprise later.

Why Buying a Business Is Becoming a Bigger Entrepreneurial Opportunity

We recently discussed the ownership transition facing many established small businesses.

Owners retire. Families decide not to take over. Partners want out. Some entrepreneurs simply decide they’ve built enough and are ready for their next chapter.

That creates a problem for one entrepreneur—and an opportunity for another.

Instead of spending years trying to create customers, revenue, processes and brand recognition from zero, a buyer may be able to acquire a company that already has them.

Imagine buying a local service company with:

12 employees
recurring customers
$1.5 million in annual revenue
equipment already in place
an established reputation
an owner ready to retire

You’re not buying an idea.

You’re buying an operating business.

But you’re also buying its risks, financial history, obligations and future cash flow.

That’s one reason the SBA’s new framework puts considerable emphasis on whether the business itself can financially support the acquisition.

What Exactly Changed?

Appendix 15 organizes 7(a) change-of-ownership transactions into four categories:

Initial Acquisition

Generally, an outside buyer becomes the new majority or largest individual owner of an existing business.

Business Expansion

An existing qualifying business acquires another business as part of its expansion.

Owner Buyout

Existing owners or certain long-term employees acquire ownership interests in the business.

ESOP and Cooperative Transactions

Ownership transfers involving qualifying employee stock ownership plans or cooperatives.

Why does this matter?

Because the category can affect the required equity injection, debt-service coverage and financial due diligence applied to the transaction.

For many entrepreneurs searching for an established company to purchase, Initial Acquisition will be the category that matters most.

How Much Money Will You Need to Put Into the Deal?

For an Initial Acquisition, SOP 50 10 8.1 requires an equity injection of at least:

10% of the total project cost.

For an Initial Acquisition, that minimum cannot be reduced or eliminated.

There’s an important distinction here.

The calculation isn’t necessarily based only on the advertised purchase price.

Suppose you purchase a company for:

Business purchase price: $1,000,000

But the financing request also includes:

Closing costs: $30,000
Working capital: $50,000

The total project cost in this simplified example becomes:

$1,080,000

A 10% equity injection would therefore be:

$108,000

—not $100,000.

Seller debt on full standby may potentially count toward part of the required equity injection, subject to SBA requirements and limits. Under the new framework, limited sources such as qualifying standby debt generally cannot account for more than half of the required injection.

That means buyers shouldn’t assume they can purchase a company with little or none of their own capital.

Pro Tip

Determine your realistic acquisition budget before shopping for businesses.

A $1 million business doesn’t necessarily mean a $1 million financing project once working capital, fees and other eligible costs are included.

The Business Has to Support the Debt

Here’s where the new framework becomes particularly important.

Buying a great company at the wrong price can still be a bad deal.

For an Initial Acquisition, the SBA framework generally requires a minimum 1.25-to-1 debt-service coverage ratio, calculated using historical or permitted adjusted historical earnings.

In plain English:

Can this business generate enough cash to service the acquisition debt and continue operating?

A 1.25 coverage ratio essentially means the applicable earnings measure needs to provide $1.25 for every $1.00 of required debt service.

That’s a much different question from:

“Could this business make more money after I buy it?”

You may have brilliant plans.

You may see marketing opportunities the current owner missed.

You might introduce AI, e-commerce, new services, better advertising or improved operations.

Those plans may make the acquisition more attractive to you.

But for the required historical coverage test, future projections generally cannot substitute for a business that doesn’t demonstrate adequate historical performance, subject to limited exceptions in the SBA rules.

That’s a major distinction for prospective buyers.

Potential matters. But the numbers the business has already produced matter too.

A $3 Million Purchase Can Trigger Much More Scrutiny

One particularly notable change affects larger acquisitions.

For an Initial Acquisition or Business Expansion where the Business Purchase Price is $3 million or more, the lender generally must obtain an independent Quality of Earnings (QoE) analysis that includes a Cash Proof.

Importantly, this threshold is tied to the applicable Business Purchase Price, not simply the amount of the SBA loan.

Think of a QoE as a deeper examination of the financial story the business is telling.

A buyer might see:

Revenue: $5 million
Reported earnings: $750,000

But the more important questions are:

How much of those earnings are sustainable?
Are unusual expenses being removed to make earnings appear stronger?
Does actual cash activity support the reported results?
Are seller adjustments reasonable?
Are there revenue or customer risks hidden beneath the headline numbers?
Will those earnings remain after ownership changes?

The SBA-required QoE must satisfy specific independence and lender requirements; a report commissioned by the seller or buyer does not automatically satisfy the SBA requirement.

For a buyer, that additional scrutiny shouldn’t necessarily be viewed as an obstacle.

It may uncover something you’d rather know before you own the company.

The Asking Price Isn’t Automatically the Business Value

This distinction becomes critical when buying an existing business.

A seller can ask:

$2 million.

That doesn’t automatically mean the company supports a $2 million valuation for purposes of the SBA-financed transaction.

Business valuation requirements apply to change-of-ownership transactions, and the financing structure has to work within those requirements.

For certain smaller transactions, the updated SBA guidance permits a lender’s internal valuation when the Business Purchase Price is $350,000 or less and applicable conditions are met. Other transactions can require an independent valuation from a qualified source.

The important point for a buyer is simpler:

The seller’s asking price isn’t the final word on value.

If the supported value doesn’t justify the proposed transaction, the solution might require:

a lower purchase price,
additional buyer equity,
appropriately structured seller financing,
or a different transaction structure.

Pro Tip

Don’t fall in love with the business before you understand the numbers.

You’re not just buying its revenue.

You’re buying its ability to produce sustainable cash flow after the previous owner leaves.

Buying a Business Is Different From Starting One

This is where the opportunity gets interesting.

Imagine two entrepreneurs each have $150,000 available.

Entrepreneur A starts from scratch.

That money may need to fund:

business formation
equipment
inventory
marketing
payroll
rent
technology
insurance
customer acquisition

And revenue may take months—or years—to develop.

Entrepreneur B acquires an existing company.

That business might already have:

customers
employees
suppliers
systems
equipment
cash flow
brand recognition

Neither approach is automatically better.

But they’re fundamentally different entrepreneurial strategies.

And for some future business owners, buying instead of building may deserve serious consideration.

Don’t Forget the Business Entity

Buying a business also creates legal and organizational decisions beyond financing.

A buyer may need to determine whether the transaction will be structured as an asset purchase or an equity/ownership purchase, and whether a new LLC or corporation should be created to acquire and operate the business.

The structure can affect issues including:

liabilities
contracts
licenses
employees
taxes
intellectual property
permits
financing
future ownership

This is an area where an attorney, accountant and lender should be involved before the transaction is finalized.

And if the acquisition requires forming a new LLC or corporation, obtaining an EIN, registering in another state or securing Registered Agent service, those steps can be addressed as part of the acquisition planning process.

What Should You Do Before Making an Offer?

If you’re seriously considering purchasing a business with SBA-backed financing, don’t make financing the last step.

Before signing a purchase agreement, understand:

Which SBA acquisition category applies to the transaction.
How much equity you’ll realistically need.
Whether the company’s historical cash flow supports the proposed debt.
Whether the asking price can be supported by an appropriate business valuation.
Whether additional financial diligence, including a Quality of Earnings analysis, will apply.
How the acquisition entity and purchase should be structured.
What happens if financing isn’t approved.

Your purchase agreement should also be reviewed by qualified legal and financial professionals and contain appropriate protections for the transaction.

Frequently Asked Questions

Can I use an SBA 7(a) loan to buy an existing business?

Yes. SBA 7(a) financing can be used for qualifying change-of-ownership transactions, subject to SBA eligibility requirements, lender underwriting and the requirements applicable to the specific transaction.

Did SBA business-acquisition rules change in October 2026?

Yes. SOP 50 10 8.1 became effective October 1, 2026, and Appendix 15 provides a dedicated framework for 7(a) change-of-ownership transactions.

Do I need 10% down to buy a business with an SBA loan?

For an Initial Acquisition, the SBA requires an equity injection of at least 10% of total project cost, and that minimum cannot be reduced or eliminated. Rules also govern what sources may count toward the required injection.

Can the seller help finance the purchase?

Potentially. Seller financing can be part of an acquisition structure. A seller note that is intended to count toward the required equity injection must meet SBA requirements, including applicable standby and source limitations.

Does SBA determine what a business is worth?

SBA change-of-ownership financing includes business valuation requirements. The lender must ensure the transaction complies with those requirements. A seller’s asking price by itself doesn’t establish the supported value of the business.

What happens when the Business Purchase Price is $3 million or more?

For qualifying Initial Acquisition and Business Expansion transactions with a Business Purchase Price of $3 million or more, the lender generally must obtain an independent Quality of Earnings analysis that includes a Cash Proof.

Can 7(a) Small or SBA Express financing be used to buy a business?

Under the SBA’s September 2026 technical update to SOP 50 10 8.1, 7(a) Small and SBA Express loans may be used for qualifying change-of-ownership transactions, subject to the requirements of Appendix 15.

What This Means for Future Business Owners

For decades, the entrepreneurial dream has often been described the same way:

Come up with an idea. Start a company. Build it.

But there’s another route.

Find something someone else spent 20 or 30 years building—and become the person who takes it forward.

Many established businesses will eventually need new owners. Some may close because nobody steps forward. Others will be acquired by competitors, employees, family members or entrepreneurs who recognize an opportunity.

The SBA’s new framework doesn’t make buying a business effortless.

It reinforces something every prospective buyer should understand:

An acquisition needs to work financially—not simply look attractive in a listing.

So before asking:

“What business should I start?”

It may be worth asking another question:

“What business could I buy?”

For the right entrepreneur, that could be an entirely different path to business ownership.

Official Resource:
U.S. Small Business Administration — SOP 50 10, Lender and Development Company Loan Programs
SOP 50 10 8.1 and the updated Appendix 15 became effective October 1, 2026.

What Does Your Company Have That Your Competitor Can’t Create With a Prompt

When Everyone Has AI, What Makes Your Business Different?

AI is making it easier for almost any company to look polished, create content, conduct research and market itself professionally. That’s good news for entrepreneurs—but it also means many of yesterday’s competitive advantages are becoming available to everyone.

For several years, businesses have been told that artificial intelligence could give them an edge.

There’s just one problem.

Your competitors have AI too.

When everyone can create a professional website, polished marketing, detailed research and seemingly authoritative content, simply looking sophisticated may no longer make a business stand out.

And new September 2026 research suggests consumers are already noticing.

The next competitive advantage may not be AI itself.

It may be everything your business possesses that AI can’t simply create with a prompt.

At a Glance

What’s Changing	Why It Matters
AI makes professional content inexpensive	Looking polished becomes less differentiating
Competitors have access to similar AI tools	AI itself isn’t necessarily an advantage
Consumers are seeing more AI-generated marketing	Trust and authenticity become more important
AI can quickly reproduce generic information	Original experience becomes more valuable
Search is becoming increasingly AI-driven	First-hand, non-commodity information matters
New businesses can look established quickly	Existing businesses need to demonstrate why their experience matters

The takeaway: AI may be commoditizing many of the things businesses once used to differentiate themselves. That could make reputation, experience, customer relationships, proprietary knowledge and execution more valuable.

Consumers Are Starting to Notice the AI Flood

A new Gartner survey released September 22, 2026 provides an interesting snapshot of how consumers are reacting.

Among 1,006 U.S. consumers surveyed:

65% said brands are producing too much AI-generated marketing content.
57% said AI-generated content has made them less trusting of brand messaging overall.
43% said they rely more on real people for shopping information and recommendations because of the prevalence of AI-generated content.
35% said they rely less on influencers for shopping information because of AI.

That doesn’t mean consumers are rejecting artificial intelligence.

It may mean they’re becoming more selective about what—and whom—they believe.

Key Takeaway

AI makes producing information easier. It doesn’t automatically make that information more credible.

For businesses, that distinction could become increasingly important.

AI Just Made “Professional Looking” Cheap

Think about what launching a polished small business once required.

A graphic designer.

A copywriter.

A web developer.

Marketing expertise.

Someone creating sales materials.

Perhaps outside research or consulting.

Today, one entrepreneur sitting at a kitchen table can use AI and inexpensive software to create a remarkably professional-looking company.

That’s an extraordinary development for entrepreneurship.

But there’s another side to it.

If nearly everyone can produce professional-looking marketing, looking professional stops being much of a differentiator.

Consider three competitors.

All three have attractive websites.

All three publish informative articles.

All three send polished emails.

All three have professional branding.

All three appear knowledgeable online.

Ten years ago, the company doing those things exceptionally well might have stood out immediately.

Today?

Those things may increasingly become the price of admission.

AI Can Create the Appearance of Expertise

Here’s where things get more complicated.

Ask an AI system to produce:

10 Things to Know Before Replacing Your Roof.

How to Choose a Financial Advisor.

The Complete Guide to Forming an LLC.

Questions to Ask Before Hiring a Contractor.

How to Choose Business Insurance.

Within seconds, it can create something that looks knowledgeable.

Now multiply that capability across millions of businesses.

We aren’t facing a shortage of information anymore.

We’re facing an abundance of information that looks authoritative.

The question for customers becomes:

Why should I believe this particular company?

That’s different.

AI can explain how a restaurant should treat customers.

It hasn’t operated a restaurant for 20 years.

AI can describe how to repair a furnace.

It hasn’t spent a freezing February night troubleshooting one.

AI can summarize common problems entrepreneurs encounter.

It hasn’t personally helped thousands of entrepreneurs solve those problems.

The information may sound similar.

The experience behind it isn’t.

Google Is Telling Businesses to Create Something AI Can’t Easily Reproduce

This isn’t merely a branding argument.

Google’s guidance for succeeding in its AI-powered search experiences specifically encourages businesses to create valuable, non-commodity content.

That includes:

Original information
First-hand experience
Unique perspectives
Content that provides genuine additional value

That’s significant.

If your competitor can generate essentially the same 2,000-word article by entering essentially the same prompt, that article isn’t much of a competitive asset.

It becomes a commodity.

Pro Tip

Before publishing your next article, guide or video, ask:

“What does this contain that couldn’t be generated without knowing our business?”

If the answer is nothing, you may be producing more information without creating much differentiation.

What Do You Know That AI Doesn’t?

This may become one of the most valuable strategic questions a small business can ask.

Think about the information trapped inside your company.

Your employees have knowledge.

Your customers ask questions.

Your salespeople hear objections.

Your technicians encounter unusual problems.

Your customer-service team sees recurring frustrations.

Your financial history reveals patterns.

Your business has made mistakes.

You’ve learned what works.

You’ve learned what doesn’t.

That’s proprietary knowledge—even if you’ve never thought of it that way.

AI can help organize it.

AI can analyze it.

AI can help communicate it.

But AI didn’t create the underlying experience.

Your business did.

Proof May Become More Valuable Than Claims

For decades, businesses have made essentially the same marketing claims.

Great service.

Industry experts.

Customer focused.

Quality you can trust.

AI can now generate thousands of variations of those statements almost instantly.

Claims are becoming extraordinarily cheap.

Proof isn’t.

Instead of Saying…	Show…
“We provide exceptional service.”	What your company does when something goes wrong
“We have decades of experience.”	What those decades taught you
“We’re industry experts.”	Answers to questions only experienced professionals encounter
“Customers love us.”	Genuine customer reviews and stories
“Our product works.”	Results, demonstrations or case studies
“We understand your problem.”	Real examples of solving it

The principle is simple:

Don’t just tell customers your business is different. Give them evidence.

Your People May Become More Valuable in an AI World

There’s an interesting irony developing.

The more synthetic content consumers encounter, the more valuable genuine human expertise may become.

Not stock photographs.

Not AI-generated executives.

Actual people.

The technician who has solved the same unusual problem 200 times.

The salesperson who understands why customers hesitate.

The founder who remembers why the company exists.

The employee who knows the question customers always ask right before buying.

The customer who can explain what actually happened after choosing the company.

Those people provide something increasingly scarce:

Evidence that real knowledge exists behind the marketing.

That makes Gartner’s finding particularly interesting: 43% of surveyed consumers said the prevalence of AI-generated content has caused them to rely more on real people for shopping information and recommendations.

AI Advertising Is Facing a Trust Problem Too

Research released by Bentley University and Gallup in 2026 provides another useful signal.

Their survey found 79% of Americans reported seeing advertisements during the previous month that appeared to have been created using AI.

But attitudes toward businesses using AI-generated advertising weren’t particularly enthusiastic.

Only 19% viewed businesses’ use of AI in advertising positively, while 49% viewed it negatively.

That doesn’t mean businesses should stop using AI to create advertising.

It suggests something more practical:

Customers probably don’t care how efficiently you produced the advertisement. They care whether they believe it.

AI can improve production.

It shouldn’t become a substitute for credibility.

Should Small Businesses Stop Using AI?

No.

That would completely miss the opportunity.

AI can be extraordinarily useful for:

Research
Analysis
Brainstorming
Automation
Drafting
Customer-service support
Data organization
Competitive analysis
Administrative work

The mistake is confusing access to AI with competitive advantage.

Your competitor can probably access the same technology.

The more useful question becomes:

What can you put into AI that your competitor doesn’t have?

That’s where AI becomes much more interesting.

Example: Same AI. Completely Different Result.

Imagine two real-estate businesses using the same AI platform.

Company A asks:

“Write an article about the five biggest mistakes first-time homebuyers make.”

AI produces a perfectly respectable article.

Company B asks:

“Here are notes from 500 conversations we’ve had with first-time homebuyers. Identify the problems that surprised buyers most often and the three issues that created the biggest difficulties.”

Now the AI has something different to work with.

Real experience.

Real customers.

Real problems.

Company A produces information.

Company B can potentially produce insight.

Same AI.

Different competitive asset.

Key Takeaway

Don’t ask AI to replace what makes your company different. Use AI to amplify what makes your company different.

Six Business Assets AI Can’t Instantly Create

1. Reputation

Years of delivering for customers can’t be generated overnight.

2. Customer Knowledge

Customer questions, complaints, objections and behaviors contain valuable business intelligence.

Capture them.

3. Experience

Mistakes, successes and unusual situations create knowledge competitors can’t simply download.

4. Original Data

Surveys, internal data, tests, customer trends and observations can create information unique to your company.

5. Real People

Employees, founders and customers can demonstrate expertise and credibility in ways generic content cannot.

6. Execution

AI can create an impressive proposal.

It can’t arrive at the customer’s business Tuesday morning and do excellent work.

A Simple AI Differentiation Test

Take something your company currently uses to attract customers:

Your website.

An article.

A sales presentation.

An email campaign.

A service description.

A proposal.

Now ask four questions:

Could a competitor generate something similar with AI in 10 minutes?

Does this contain knowledge unique to our company?

Does it provide evidence supporting our claims?

Does it give customers a reason to trust us specifically?

If the answer to the first question is yes and the other three are no, you may have discovered an area where your competitive differentiation is disappearing.

What Small-Business Owners Should Do Now

You don’t need another dozen AI subscriptions.

Start with an inventory of what makes your company difficult to copy.

Capture what your employees know

Don’t allow years of experience to exist only inside someone’s head.

Save recurring customer questions

Those questions can become articles, FAQs, videos, sales materials and product improvements.

Document successful projects

Turn actual work into case studies and examples.

Collect genuine customer feedback

Reviews and testimonials become increasingly important when anyone can generate marketing claims.

Produce original information

Survey customers. Analyze trends. Conduct experiments. Share observations.

Put your people into your marketing

Let customers see who actually understands the product, service or industry.

Then use AI

Use AI to analyze, organize, expand and distribute all of that knowledge.

That’s a much stronger use of the technology than simply asking it to create more generic content.

Frequently Asked Questions

Is AI-generated content bad for a small business?

Not inherently. AI can be extremely useful for researching, organizing and drafting content. Problems arise when businesses publish generic or inaccurate AI output without adding expertise, verification or original value.

Does Google penalize AI-generated content?

Google’s guidance focuses primarily on the usefulness and quality of content rather than whether AI helped create it. Its current guidance emphasizes original, valuable and non-commodity content, including first-hand experience.

Should a small business disclose that it uses AI?

That depends on how AI is being used, applicable laws and the expectations of customers. Businesses should pay particular attention when AI affects sensitive decisions, customer data or representations that could mislead consumers.

What’s the biggest competitive advantage AI can give a small business?

AI can help a business extract more value from information and expertise it already possesses. The strongest advantage may therefore come from combining AI with proprietary data, genuine expertise, customer knowledge and strong execution rather than simply generating more content.

Can AI make it easier to start a competing business?

It can reduce the time and expense involved in tasks such as preliminary research, content creation, branding and administration. But forming and operating a sustainable business still requires real-world execution, financial management, legal compliance, customers and credibility.

What This Means for Small Business

For years, technology helped small businesses look bigger.

AI may take that idea further than anything before it.

A one-person startup can now produce work that once required multiple specialists.

That’s an extraordinary opportunity for entrepreneurs.

It’s also a warning for established businesses.

The appearance of competence is becoming easier to create. Actual competence isn’t.

AI isn’t eliminating competitive advantage.

It’s changing where competitive advantage comes from.

Twenty years ago, simply having a professional website could separate a business from its competitors.

Later, sophisticated digital marketing could do it.

Today, AI is making many of those capabilities broadly accessible.

So the bar moves again.

Your customers will still want reasons to choose you.

But increasingly, those reasons may need to be things your competitors can’t simply generate:

Your customers. Your results. Your knowledge. Your reputation. Your people. Your experience. Your ability to deliver.

AI can amplify every one of those advantages.

It can’t instantly create them.

Which leaves perhaps the most important business question to ask as AI becomes commonplace:

What does your company have that your competitor can’t create with a prompt?

Finding the answer may be considerably more valuable than finding your next AI tool.

Official Resources & Further Reading

Gartner — Consumer Attitudes Toward AI-Generated Marketing
September 22, 2026

Google Search Central — AI Features and Your Website
Guidance for creating valuable, non-commodity content for AI-powered search experiences.

Bentley University / Gallup — Americans’ Attitudes Toward Business Use of AI
2026 research examining consumer attitudes toward AI, including AI-generated advertising.

Federal Reserve Bank of San Francisco — AI Adoption Among Small Businesses
September 2026 research examining how small businesses are adopting artificial intelligence.

Why Is The IRS Is Reexamining Pandemic ERA Business Loans

The IRS Is Reexamining Pandemic Business Loans. What Should Small Business

New IRS examinations involving approximately $100 billion in pandemic-era loans raise questions about tax reporting, outstanding SBA debt, and the financial records business owners should still have.

The pandemic may be behind us, but the financial decisions businesses made during that period are still receiving attention from federal authorities.

On September 23, 2026, the U.S. Small Business Administration (SBA) announced that the Internal Revenue Service (IRS) had opened examinations following the identification of discrepancies associated with approximately $100 billion in pandemic-era business loans.

The announcement is the latest development in a multiyear effort to investigate potential fraud involving the Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (EIDL) program.

For small-business owners who received assistance during the pandemic, the announcement raises an important question: Could a loan application submitted five or six years ago create financial or tax problems today?

The answer depends on the circumstances.

The $100 billion figure represents loans associated with identified discrepancies, not $100 billion in confirmed fraud or unpaid taxes. Nor does the announcement mean that every business that received pandemic assistance is being audited.

Nevertheless, it is a timely reminder that business owners should understand their remaining loan obligations, preserve important financial records, and know what to do if the IRS or SBA requests additional information.

Here is how the story developed, what has changed, and what business owners should consider today.

At a Glance: What Business Owners Need to Know

Key question	What it means for your business
What happened?	The IRS opened examinations following a review of discrepancies associated with approximately $100 billion in pandemic-era loans.
Is this a new investigation?	It is a new development in an enforcement effort that began during the pandemic.
Are all PPP and EIDL borrowers being audited?	No blanket audit of all borrowers was announced.
Does a discrepancy mean fraud?	No. Differences in reported information require examination before conclusions can be reached.
Is PPP forgiveness now taxable?	No. Qualifying PPP loan forgiveness remains generally excluded from federal gross income.
What should owners do?	Review loan applications, tax returns, forgiveness records, outstanding balances, and supporting documentation.

How We Got Here: A Quick Timeline of Pandemic Business Loan Oversight

The September 2026 announcement did not come out of nowhere. Federal authorities have been investigating pandemic-relief fraud for years.

2020–2021: Emergency funding reaches small businesses

The federal government launches PPP and expands EIDL assistance to help businesses survive the economic disruption caused by COVID-19.

PPP provides potentially forgivable loans for eligible payroll and other business expenses. COVID EIDL provides longer-term financing to help eligible businesses meet financial obligations and operating expenses.

The programs distribute substantial funding to businesses facing unprecedented economic uncertainty.

2022–2023: Investigators identify widespread potential fraud

Federal authorities continue reviewing suspicious applications, duplicate funding requests, and other potential misuse of pandemic assistance.

In June 2023, the SBA Office of Inspector General estimates that more than $200 billion in pandemic-relief assistance was potentially fraudulent.

The estimate identifies suspected fraud, not a final determination that every dollar was improperly obtained.

2024–2025: Investigations and recovery efforts continue

Federal authorities continue pursuing cases involving allegedly fraudulent applications, false financial information, and improper use of pandemic assistance.

Meanwhile, businesses with outstanding COVID EIDL loans remain responsible for meeting their repayment and servicing obligations.

September 23, 2026: The IRS announces a new phase of examinations

The SBA announces that it referred more than $200 billion in suspected pandemic-relief fraud to the IRS earlier in 2026.

The IRS compares information provided in loan applications with information reported on federal tax returns.

That comparison identifies discrepancies associated with approximately $100 billion in loans, prompting IRS examinations to determine whether additional taxes or penalties apply.

The significance of this latest development is not simply that federal authorities are continuing to investigate pandemic-relief fraud.

It is that information businesses provided when applying for assistance is being compared with their federal tax reporting to identify potential discrepancies.

That distinction brings the issue directly into the financial records of businesses that received pandemic assistance.

What Should Concern Business Owners Today?

For legitimate business owners, the latest announcement is not a reason to panic. It is a reason to revisit financial records that may not have received much attention since the pandemic.

There are five areas worth examining.

1. Do Your Original Loan Applications Match Your Financial Records?

When businesses applied for PPP or COVID EIDL assistance, they provided information about payroll, revenue, business operations, and other eligibility requirements.

The September 23 announcement specifically identifies comparisons between information supplied to the SBA and information reported to the IRS.

Consider a business that reported $400,000 in revenue on a pandemic-relief application but reported $250,000 on its federal tax return.

Does that difference automatically indicate fraud?

No.

The application and tax return may have covered different reporting periods. The business may have used a different accounting method, filed an amended return, or made an error that requires clarification.

PPP and EIDL applications also had different eligibility and financial-reporting requirements. Figures reported for one program should not automatically be expected to match those reported for another.

However, a significant unexplained difference could warrant additional examination.

What business owners should do: Locate your original loan applications and compare the reported figures with the relevant tax returns, payroll records, financial statements, and bank deposits.

If something does not reconcile, ask your accountant to investigate the difference before assuming that either document was incorrect.

Do not alter historical records to make the numbers match. If a material error is discovered, obtain professional guidance about the appropriate next steps.

2. Was Your PPP Loan Forgiveness Properly Documented?

PPP was designed to provide forgivable assistance when borrowers satisfied the program’s applicable requirements.

Businesses generally needed to document eligible expenses and meet the relevant forgiveness rules.

Although a loan may have been forgiven years ago, the supporting documentation can remain important if questions arise about eligibility, reported payroll expenses, or the use of funds.

There is also an important tax distinction.

Under federal law, qualifying PPP loan forgiveness generally creates tax-exempt income. Businesses can also generally deduct otherwise deductible eligible expenses paid with forgiven PPP funds, subject to applicable requirements.

The September announcement does not change the federal tax treatment of legitimate PPP forgiveness.

However, a business that obtained funds through false representations or improperly claimed forgiveness could face different legal and tax questions.

What business owners should do: Confirm that you can locate your PPP forgiveness application, forgiveness determination, payroll records, and documentation supporting the expenses used to obtain forgiveness.

If your business also claimed the Employee Retention Credit (ERC), review whether the same wages were improperly used to support both PPP forgiveness and the ERC.

The IRS prohibits claiming the ERC on wages used to obtain PPP forgiveness, subject to the applicable wage-allocation rules. A business may still qualify for the ERC on other eligible wages.

3. Do You Still Have an Outstanding COVID EIDL Loan?

This is an important distinction that can easily get lost in discussions about pandemic-relief funding.

PPP and COVID EIDL were different programs.

PPP loans could qualify for forgiveness. COVID EIDL loans generally created repayment obligations, even when the business experienced significant financial difficulties.

For business owners who still have an outstanding COVID EIDL balance, those obligations did not disappear when the pandemic ended.

The SBA continues to provide loan servicing, repayment information, and payment assistance for eligible borrowers.

What business owners should do: Review your current loan balance, payment history, interest, and repayment schedule.

If your business is experiencing financial difficulties, contact the SBA before allowing the loan to become seriously delinquent.

The SBA’s current payment-assistance program is designed for eligible borrowers experiencing temporary financial difficulties. Among other requirements, the business must be actively operating, the loan must meet the SBA’s payment-status requirements, and the borrower and owners must not be subject to active bankruptcy proceedings.

Approved assistance temporarily reduces payments. It does not eliminate the underlying debt, and interest continues to accrue.

Business owner tip: If you have an outstanding COVID EIDL loan, review your account through the official SBA Loan Portal:

https://lending.sba.gov

Verify your current balance, payment status, and any notices from the SBA. Do not assume that closing a business or stopping operations automatically eliminates the loan.

4. What If Your Accountant or Another Party Prepared the Original Application?

During the pandemic, many small-business owners relied on accountants, payroll providers, lenders, or third-party consultants to prepare relief applications.

Some owners may not have personally entered every figure submitted to the SBA.

However, using a third party does not automatically eliminate a borrower’s responsibility for representations made in a loan application.

If an application contains inaccurate information, the relevant facts—including who prepared it, what information was supplied, and what the borrower knew—may matter.

What business owners should do: Retrieve the complete application package, including supporting documents and communications with the person or company that prepared it.

If you discover a material error, consult a qualified tax professional or attorney before making corrections or contacting federal authorities.

An innocent bookkeeping discrepancy and a knowingly false application are not the same thing. The appropriate response depends on the circumstances.

5. Are You Planning to Sell Your Business or Purchase an Established Company?

This is an area that deserves particular attention as more business owners consider retirement, ownership transitions, or selling their companies.

A business that received pandemic assistance may still have outstanding loan obligations, collateral arrangements, or unresolved compliance issues.

For example, imagine purchasing an established company only to discover that it has an outstanding COVID EIDL loan secured by business assets.

Depending on the transaction structure and loan documents, the existing debt and collateral arrangements could affect the purchase, financing, or transfer of assets.

The SBA has specific procedures for COVID EIDL servicing actions, including requests involving changes in ownership, loan assumptions, releases of collateral, and releases of guarantors.

Before buying an established business, prospective purchasers should consider reviewing:

Outstanding PPP or EIDL obligations and the associated loan documents.
Any SBA liens, collateral agreements, or personal guarantees.
PPP forgiveness determinations and relevant financial records.
Notices of pending audits, examinations, repayment disputes, or other unresolved matters.
Whether the proposed transaction requires SBA approval or a loan servicing action.

A business acquisition attorney and qualified accountant can help determine which obligations may remain with the seller, which could affect the buyer, and what protections should be included in the purchase agreement.

A buyer does not automatically assume every liability of the seller. The outcome depends on the transaction structure, applicable law, loan agreements, and other relevant circumstances.

The key takeaway: Buying an established business means examining its financial history, not just its current revenue, profitability, and customer base.

How Long Should Business Owners Keep Their Pandemic Loan Records?

One common mistake is assuming that financial records can be discarded once a loan has been forgiven or a tax return is several years old.

Record-retention requirements depend on the type of record, the applicable program, and the circumstances.

For federal income tax purposes, the IRS generally has three years to assess additional tax, but certain situations involve longer periods. For example, substantial omissions of income can trigger a six-year assessment period, while fraudulent returns may be assessed without a time limit.

Loan agreements, forgiveness requirements, and other applicable rules may also require records to be retained longer than the ordinary tax period.

For business owners who received pandemic assistance, it is sensible to preserve the complete loan file and supporting financial documentation until the applicable retention periods have expired and any outstanding examinations or disputes have been resolved.

If you are uncertain whether records can be discarded, consult your accountant or attorney first.

What If You Receive a Letter From the IRS?

Receiving an IRS notice does not automatically mean that your business has committed fraud.

An examination may involve a request for documents, clarification of reported figures, or an explanation of a particular transaction.

The IRS generally provides written instructions identifying the information it needs and the applicable response deadline.

If you receive a notice concerning pandemic-relief assistance, take the following steps:

1. Verify the notice.

Confirm that the correspondence is legitimate. Use the official IRS website or independently verified contact information rather than relying on unexpected emails, text messages, or payment requests.

2. Identify the issue and response deadline.

Determine whether the IRS is requesting documentation, proposing an adjustment, or initiating an examination. Do not ignore the deadline.

3. Gather the relevant financial records.

Collect the original loan application, applicable tax returns, payroll information, bank statements, and supporting documentation.

4. Seek professional guidance.

A qualified CPA, enrolled agent, or tax attorney can help evaluate the issue and determine an appropriate response. If fraud allegations or potential criminal exposure are involved, consult an attorney experienced in tax controversies.

5. Respond accurately and preserve your records.

Provide the requested information through the appropriate channels. Retain copies of correspondence and proof of submission.

For additional guidance, visit the IRS resource on understanding an IRS notice or letter:

https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter

Frequently Asked Questions

Is the IRS auditing every business that received a PPP or EIDL loan?

No. The September 23 announcement describes examinations arising from identified discrepancies. It does not announce a blanket audit of all pandemic-relief borrowers.

Will my forgiven PPP loan now become taxable?

Qualifying PPP loan forgiveness remains generally excluded from federal gross income. The new announcement does not change that treatment. However, improperly obtained assistance or inaccurate tax reporting can create separate issues.

Can the IRS investigate a pandemic loan from 2020 or 2021?

Potentially. The applicable assessment period depends on the tax year, the type of issue, and the relevant legal provisions. A business should not assume that all pandemic-era tax matters are closed simply because several years have passed.

What if my business has closed but I still owe an EIDL loan?

Closing a business does not automatically eliminate its loan obligations. The SBA provides specific servicing procedures for anticipated business closures and liquidation. Borrowers should contact the SBA to understand their obligations and available options.

Should I amend an old tax return if I discover an error in my loan application?

Not automatically. A loan application error does not necessarily mean the tax return is incorrect. Have a qualified tax professional review the underlying records and determine whether any correction is appropriate.

Final Thoughts: The Pandemic Is Over, but Your Business Records Still Matter

For many small-business owners, PPP and EIDL assistance provided a financial lifeline during one of the most difficult periods in recent business history.

Years later, those programs remain part of the financial history of thousands of companies.

The September 23 announcement is a reminder that information submitted during the pandemic can still be relevant to federal tax examinations and loan compliance.

But there is an important difference between a legitimate business that received assistance and a borrower who knowingly submitted false information to obtain funds.

Business owners should not interpret the announcement as evidence that every pandemic-relief borrower faces renewed scrutiny.

Instead, use it as an opportunity to review your records, resolve outstanding loan obligations, and ensure that your financial documentation accurately reflects your business activities.

If you are preparing to sell your business, purchase an established company, or transition ownership to a family member, pandemic-era financing should also be part of your financial and legal review.

The bottom line: You cannot change the financial decisions your business made during the pandemic, but you can make sure you understand them, have the documentation to explain them, and address any unresolved obligations before they become larger problems.

Official Government Resources

For business owners who want to review the latest developments or check their pandemic-era loan obligations, the following government resources provide additional information.

1. SBA: Pandemic-Relief Fraud and Enforcement Updates

Review official SBA announcements and developments involving PPP and COVID EIDL investigations.

https://www.sba.gov/about-sba/sba-newsroom

2. SBA: COVID-19 Economic Injury Disaster Loan

Information about COVID EIDL repayment, loan servicing, outstanding balances, and borrower obligations.

https://www.sba.gov/funding-programs/loans/covid-19-relief-options/covid-19-economic-injury-disaster-loan

3. SBA Loan Portal

Access your SBA loan account to review balances, payment information, and available servicing options.

https://lending.sba.gov

4. IRS: How Long Should I Keep Records?

Official IRS guidance explaining federal tax record-retention requirements and circumstances that may require businesses to preserve records for longer periods.

https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records

5. IRS: Understanding Your IRS Notice or Letter

Guidance for business owners who receive correspondence requesting additional information or notifying them of an examination.

https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter

Your Next Customer May Not Live in America

Your Next Customer May Not Live in America, Is Your Small Business Ready to Sell Overseas?

How American entrepreneurs can use technology, overcome international business barriers, and discover new opportunities for growth beyond U.S. borders.

Imagine opening your business email tomorrow morning and finding an inquiry from a potential customer in Germany. They discovered your website, like what you offer, and want to place an order.

There’s just one problem: You’ve never sold anything outside the United States.

Can you accept their payment? Will your product meet their country’s requirements? How much will shipping cost? What happens if they want to return it?

Or perhaps you operate a consulting business, and a company in Canada wants to hire you. There’s no physical product to ship, but you’ll still need to consider contracts, payment arrangements, currency conversion, and potentially foreign tax requirements.

For many American small businesses, international expansion sounds like something reserved for large corporations with overseas offices, global supply chains, and dedicated legal departments.

But selling internationally doesn’t necessarily require any of those things.

An American entrepreneur can potentially reach overseas customers through an existing website, an online marketplace, or a digital service. Modern technology can make communication, payments, and international transactions more accessible to businesses of all sizes.

The opportunity is worth exploring. However, reaching an international customer and successfully serving that customer are two very different things.

Before your small business begins selling overseas, you need to understand where the opportunities exist, what challenges you may encounter, and how to determine whether international growth makes financial sense.

This guide explores the fundamentals of international selling and introduces three areas every entrepreneur should consider: technology and language, business operations and compliance, and international market growth.

At a Glance: What Does It Take to Sell Internationally?

Selling internationally can mean shipping a product to a customer in another country, providing professional services to an overseas company, or delivering digital products through an online platform.

The requirements vary depending on your business, the country you’re selling to, and the type of product or service you provide.

Area	What your business needs to consider
International demand	Are customers in other countries looking for what you sell?
Technology and language	Can overseas customers find, understand, and use your website?
Payments	Can you accept international payments and manage currency conversion?
Shipping and delivery	Can you deliver your product or service reliably and profitably?
Taxes and compliance	What U.S. and foreign requirements apply to your transactions?
Growth strategy	Can you test international demand before making a major investment?

The U.S. Small Business Administration provides resources to help entrepreneurs evaluate these questions, including export planning, market research, financing, and international trade requirements.

1. You May Already Have International Customers Looking for You

Before spending money on international advertising or creating a foreign-language website, consider something much simpler.

Look at where your existing customers and website visitors are coming from.

An American business might discover that people in Canada are regularly visiting its product pages. A software company might receive inquiries from businesses in the United Kingdom. A consultant might find that an article published months ago is attracting visitors from Australia.

These visitors aren’t necessarily customers yet. However, they may provide early clues about where international demand exists.

If your business has an established website, begin by reviewing:

Website traffic by country and the pages international visitors view most frequently.
Overseas inquiries, abandoned shopping carts, and attempted international orders.
Search terms that bring visitors from outside the United States.
Existing customers who have foreign billing addresses or international business operations.

For example, imagine an American company selling specialty woodworking tools. Its website receives consistent traffic from Canadian visitors, and several customers have asked whether the company ships to Ontario.

Rather than immediately launching a global advertising campaign, the owner could investigate whether serving Canadian customers is commercially viable.

That might involve researching shipping costs, applicable Canadian import requirements, competing products, customer demand, and the final price a Canadian buyer would pay.

If the numbers work, Canada could become a potential test market.

The important distinction is that international website traffic is an indication of interest, not proof of profitable demand.

Small Business Takeaway

Your first international growth opportunity may already be visible in your website analytics, customer inquiries, or existing sales records. Look for evidence of demand before investing in expansion.

2. Technology Is Making International Selling More Accessible

Comercio digital transfronterizo: la revolución de los negocios internacionales

A generation ago, reaching overseas customers often required international distributors, extensive business travel, or substantial investment in foreign sales operations.

Today, an American business can potentially reach international customers through its existing website, online marketplaces, digital advertising, and virtual communication.

Technology doesn’t eliminate the challenges of international business, but it can reduce some of the barriers to finding and serving customers.

Consider a small American business selling handmade home décor.

Its owner could use an e-commerce platform to display products to international shoppers, translation tools to make descriptions understandable, and a payment provider that supports transactions from customers in selected foreign markets.

Shipping software may also help calculate delivery costs and prepare necessary documentation.

For a service-based company, the process could be even more straightforward. A graphic designer or business consultant may be able to communicate with overseas clients, deliver completed work electronically, and receive payment without shipping a physical product.

However, technology alone doesn’t make a business ready to sell internationally.

A website that accepts international orders still needs to provide accurate product information, comply with applicable regulations, and communicate realistic delivery expectations.

The U.S. International Trade Administration identifies website performance, search visibility, translation capabilities, and localized customer experiences as important elements of international e-commerce.

Language Is Only Part of the Challenge

Imagine finding a product on a foreign website. The description has been translated into English, but the price is displayed in an unfamiliar currency, the measurements use a different system, and the shipping information doesn’t explain whether delivery to the United States is available.

You might understand the product perfectly and still decide not to purchase it.

Your international customers can encounter the same problem.

Preparing a website for overseas customers may involve more than translating a few pages. Depending on the market, businesses may need to address local currencies, measurement systems, payment preferences, customer support, and culturally appropriate product descriptions.

AI-powered translation can help businesses prepare multilingual content, but important product specifications, contractual terms, and legally required information may need professional review.

The objective isn’t simply to make your website readable in another language. It’s to make the entire purchasing experience understandable, trustworthy, and practical for the customer.

In our next article, we’ll explore how small businesses can use AI, multilingual websites, international SEO, and e-commerce technology to reach overseas customers without unnecessarily rebuilding their entire digital presence.

3. Selling Overseas Is One Thing. Delivering Profitably Is Another.

Fulfillment für kleine Online-Shops – flexibel, persönlich, ohne Mindestmenge

Let’s return to our woodworking business.

The owner receives an order from a customer in Canada. The customer is willing to pay $150 for a specialty tool.

At first glance, that’s a successful sale.

But the business still needs to account for shipping, packaging, payment processing, currency conversion, any applicable duties and taxes it has agreed to cover, and the possibility of a return.

A profitable domestic transaction may become considerably less attractive when these additional costs are included.

The challenge is different for a service-based company, but it doesn’t disappear.

A U.S. consultant working with an overseas client may need to address payment terms, foreign exchange fees, contract enforcement, intellectual property, and applicable tax obligations.

The U.S. Commercial Service advises exporters to consider payment risk, foreign regulations, product standards, and shipping requirements as part of preparing for international sales.

Understand the Full Cost of an International Sale

Consider the following hypothetical transaction.

Illustrative example · Physical product

A $150 international order

Assume the seller has agreed to cover the listed shipping and import-related expenses.

Customer payment	$150.00
Product cost	−$55.00
International shipping and packaging	−$28.00
Payment and conversion fees	−$7.00
Seller-paid import charges	−$15.00
Other allocated operating expenses	−$20.00
Estimated profit before income taxes	$25.00

Illustrative amounts only. Actual costs, taxes, duties, and payment responsibilities depend on the product, destination, shipping terms, and transaction.

The business generated $150 in revenue, but its estimated profit was only $25.

That may still be an acceptable transaction. However, the owner needs to understand the actual economics before deciding whether to pursue additional international sales.

What About International Taxes and Regulations?

Selling internationally can introduce obligations that don’t arise in an ordinary domestic transaction.

Depending on the product, service, destination, and transaction structure, a business may need to consider:

U.S. export controls and licensing requirements.
Foreign product standards and import restrictions.
Customs documentation, tariffs, and import duties.
Value-added tax (VAT), goods and services tax (GST), or other applicable foreign taxes.
Consumer protection, privacy, and contractual requirements.

These obligations vary by country and type of business. They should be researched before accepting orders in a new market.

The International Trade Administration provides country-specific information about customs requirements, product standards, and trade regulations.

Do You Need to Form a Company in Another Country?

Not necessarily.

A U.S. business may be able to sell products or provide services to foreign customers without establishing a separate legal entity overseas.

However, selling across borders and operating a business within another country are not always treated the same way.

Establishing a foreign office, hiring employees abroad, maintaining inventory in another country, or conducting certain regulated activities may create additional registration, tax, or licensing obligations.

The applicable requirements depend on the destination country’s laws and the business’s actual activities.

For entrepreneurs considering international growth, having an appropriately organized U.S. business, accurate financial records, and clear contractual arrangements provides a useful starting point.

MyUSACorporation can help entrepreneurs establish and maintain their U.S. business structure through services such as LLC formation , incorporation , and EIN applications .

However, forming a U.S. LLC or corporation does not automatically satisfy foreign business registration, tax, or licensing requirements.

In our upcoming international business operations guide, we’ll examine the financial and regulatory considerations in greater detail, including how businesses can evaluate payment methods, shipping arrangements, and the true cost of serving overseas customers.

4. The World Is a Big Market. Where Should Your Business Start?

A Guide to Procurement Market Intelligence for Smart Sourcing

One of the biggest mistakes a small business could make is assuming that international expansion means trying to sell everywhere at once.

Different countries have different customer preferences, competitive conditions, payment systems, regulations, and delivery costs.

A product that sells successfully in the United States may encounter limited demand in another country. A service that attracts customers in one market may require significant changes to succeed elsewhere.

Rather than attempting to reach the entire world, consider starting with one market where your business has evidence of potential demand.

Choosing Your First International Market

Let’s imagine a U.S. company that sells specialized outdoor equipment.

The owner has noticed visitors from Canada, Germany, and Australia.

All three countries could represent potential opportunities, but the business needs more information before deciding where to begin.

Research question	Why it matters
Is there measurable demand?	Identifies whether customers are actively seeking the product.
What does the competition look like?	Helps evaluate pricing and market positioning.
How much will delivery cost?	Determines whether the business can maintain acceptable margins.
Are there language barriers?	Identifies potential translation and customer service needs.
What regulations apply?	Helps determine the cost and complexity of entering the market.
Can the business support customers?	Evaluates communication, returns, and operational capacity.

The answers may reveal that one market is easier to test than another.

For example, Canada may offer practical advantages for some American businesses because of geographic proximity and shared language in many regions. However, Canadian import requirements, taxes, product regulations, and French-language obligations in certain circumstances still need to be considered.

For other businesses, a different country may offer stronger demand or a more suitable customer base.

The right starting point depends on what the business sells and its ability to serve that market.

The SBA offers market research resources and connections to U.S. Export Assistance Centers that can help small businesses evaluate potential overseas opportunities.

Start Small, Measure Results, and Expand Carefully

An international growth strategy doesn’t have to begin with a major investment.

A small business could begin by researching a single market, evaluating a limited product offering, and testing whether it can generate profitable sales.

The owner might start by accepting a small number of international orders or offering a specific service to customers in one country.

The results can help answer important questions.

Are customers willing to pay the final price? Can the business deliver reliably? Are communication and support manageable? Does the revenue justify the additional operational costs?

If the initial test produces encouraging results, the business can evaluate whether to expand its offering, invest in localized marketing, or explore additional markets.

If the results are disappointing, the owner can reassess the opportunity without having committed substantial resources to an unproven expansion strategy.

International growth should be driven by demonstrated demand and sustainable business economics, not simply the ability to reach customers in another country.

Our third follow-up article will explore how entrepreneurs can identify promising overseas markets, evaluate international demand, and develop a practical market-entry strategy.

5. Is Your Small Business Ready to Explore International Sales?

Before pursuing overseas customers, take a few minutes to evaluate your business’s current position.

You don’t need to have every answer today. The objective is to identify which areas deserve additional research before committing resources.

International Sales Readiness: Is Your Small Business Prepared?

Before pursuing overseas customers, take a few minutes to evaluate your business’s current position.

You don’t need to have every answer today. The objective is to identify which areas deserve additional research before committing resources.

1. International Customer Demand

Have you identified potential customers outside the United States? Review your website analytics, customer inquiries, and existing sales data for signs of international interest.

2. Target Market Research

Have you identified at least one international market worth exploring? Consider customer demand, competition, pricing, language, and local business requirements.

3. Website and Communication

Can international customers understand your products or services, navigate your website, and contact your business? Determine whether translation, localized content, or additional customer support may be necessary.

4. International Payments

Can your business accept payments from customers in your target country? Research available payment methods, currency conversion, transaction fees, and fraud prevention.

5. Shipping and Delivery

Can you deliver your products or services reliably and profitably? Consider international shipping costs, customs requirements, delivery times, and return policies where applicable.

6. Taxes and Regulatory Requirements

Have you researched the U.S. and foreign regulations that may apply to your business? Depending on what you sell and where you sell it, additional tax, licensing, product compliance, or export requirements may apply.

7. International Profitability

Have you calculated the potential profitability of an international transaction? Include payment processing, currency conversion, shipping, applicable duties and taxes, and additional operating expenses.

8. Your International Growth Strategy

Can you test international demand without disrupting your existing business? Consider starting with one country, a limited product or service offering, and a manageable investment.

What Your Answers Tell You

If you answered yes to most of these questions, you may have a useful foundation for exploring international sales.

If several areas remain unanswered, use them to guide your research before investing in overseas marketing or accepting international orders.

The goal isn’t to become an international business overnight. It’s to understand the opportunity, identify potential obstacles, and take the next step with confidence.

6. Where Can Small Businesses Find Help With International Expansion?

You don’t have to navigate international commerce entirely on your own.

Several U.S. government resources provide guidance on export planning, market research, regulatory requirements, and international sales.

U.S. Small Business Administration

Provides information about export planning, financing, international market research, and trade assistance for small businesses.

Resource: Trade Tools for International Sales

U.S. Commercial Service

Offers export guidance, market intelligence, international business resources, and assistance with identifying foreign buyers.

Resource: Learn How to Export

International Trade Administration

Provides resources covering international e-commerce, website localization, foreign regulations, and country-specific business requirements.

Resource: Website Internationalization

These resources can help business owners move beyond general assumptions and evaluate the specific opportunities and requirements associated with their intended markets.

Frequently Asked Questions About Selling Internationally

Can a small business sell internationally without opening an office overseas?

Yes. Many businesses can sell products or services to foreign customers from their existing U.S. operations. However, the requirements depend on the country, the business activity, and whether the company establishes a taxable or legal presence in the foreign market.

Do I need an international website to sell overseas?

Not necessarily. An existing website or online marketplace may support international transactions. However, the business should verify that customers can understand its offering, complete payments, and receive the products or services they purchase.

Can an LLC sell products or services internationally?

Yes. A U.S. LLC can engage in international business, subject to applicable U.S. and foreign laws. Forming an LLC does not, by itself, eliminate export restrictions or foreign registration and tax requirements.

Do I have to charge foreign customers in their local currency?

Not always. Depending on the payment provider and transaction arrangements, customers may be able to pay in U.S. dollars or a supported local currency. Businesses should understand conversion costs, customer payment preferences, and the amount they will ultimately receive.

Does selling internationally mean I have to pay taxes in another country?

Not necessarily. Foreign tax obligations depend on factors such as the destination country, the product or service, transaction volume, local registration thresholds, and the business’s activities in that country. Businesses should obtain qualified tax advice when evaluating their specific circumstances.

What is the easiest way to start selling internationally?

A practical starting point is to identify a country where your business has evidence of demand, research the applicable requirements, calculate the expected costs, and test a limited offering before making a larger investment.

Final Thoughts: Your Next Growth Opportunity May Be Beyond America’s Borders

For many American entrepreneurs, growing a business has traditionally meant finding more local customers, expanding into neighboring communities, opening additional locations, or introducing new products and services.

But what if your next opportunity isn’t down the street, across town, or even in another state?

What if it’s thousands of miles away?

Today’s technology has made it possible for small businesses to connect with customers around the world in ways that once required substantial financial resources and international business infrastructure.

An American retailer can reach overseas shoppers through an online marketplace. A consultant can work with clients on another continent. A small manufacturer can explore international demand without immediately establishing operations in another country.

Yet the ability to reach international customers doesn’t automatically mean a business is prepared to serve them.

Language differences, payment processing, shipping expenses, regulatory requirements, and customer expectations can all influence whether an international opportunity becomes a profitable transaction.

That’s why successful international growth begins with preparation, not expansion.

You don’t need to sell to the entire world. You need to identify where your business has an opportunity, understand what it takes to serve that market, and determine whether the potential rewards justify the investment.

For some businesses, that may mean testing a single product in Canada. For others, it could mean offering professional services to clients in Europe or making digital products available to customers in several countries.

The important thing is to start with a manageable opportunity, learn from the experience, and build on what works.

Your next customer may not live in America. But with the right preparation, your American small business may be ready to serve them.

Coming Next: Turning International Opportunity Into Business Growth

This article is the first in our four-part series exploring how American small businesses can identify, evaluate, and pursue international growth opportunities.

In the next three articles, we’ll move beyond the big picture and examine the practical steps entrepreneurs can take to prepare their businesses for overseas customers.

Part 2: Your Website Speaks English. Your Next Customer May Not.

We’ll explore how AI, website translation, international SEO, and e-commerce technology can help American businesses reach overseas customers, communicate effectively, and create a purchasing experience that builds trust across borders.

Part 3: Selling Overseas Is One Thing. Getting Paid, Delivering, and Staying Compliant Is Another.

We’ll examine international payments, currency conversion, shipping, customs, taxes, and the regulatory considerations that can affect the profitability and legality of cross-border transactions.

Part 4: The World Is a Big Market. Where Should Your Small Business Start?

We’ll bring everything together with a practical international growth strategy, showing entrepreneurs how to identify promising markets, evaluate demand, test opportunities, and expand without unnecessarily putting their existing businesses at risk.

The world is open for business. The next step is determining where your business fits in it.

Why the next generation of entrepreneurs may find their greatest opportunity in buying an established business

Millions of Small Businesses Are Approaching an Ownership Transition. Who Will Take Over?

Why the next generation of entrepreneurs may find new opportunities in buying an established business rather than starting one from scratch.

«Le 1er février, c’est le premier jour de ma retraite», dit Léo-Paul Arsenault - La Voix Acadienne

Imagine spending 35 years building a successful business.

You’ve developed loyal customers, hired employees, established relationships with suppliers, and created something that has become part of your community.

Now you’re ready to retire.

Your children have chosen different careers. Your employees enjoy their jobs but aren’t interested in taking ownership. You don’t want to close the doors, but you can’t keep running the company forever.

Who takes over?

This is a question facing business owners across America, and it could create a significant opportunity for the next generation of entrepreneurs.

For decades, the traditional path to entrepreneurship has been relatively straightforward: develop an idea, establish a company, find customers, and build the business from the ground up.

But what if your next business opportunity isn’t something you need to create?

What if it’s a company that already exists, with customers, employees, equipment, and an owner who is ready to hand over the keys?

A growing number of ownership transitions could make buying an established business an increasingly important path to entrepreneurship over the next decade.

At a Glance: The Opportunity Behind America’s Ownership Transition

Approximately six million U.S. small and medium-sized businesses are projected to face ownership transitions by 2035.
More than one million are estimated to be viable candidates for sale or employee ownership, representing up to $5 trillion in enterprise value.
Buying an existing business may provide an established customer base, operating history, equipment, and experienced employees.
Business acquisitions can be financed through several arrangements, including conventional lending, seller financing, and qualifying SBA-backed loans.
Entrepreneurs must evaluate a company’s financial condition, liabilities, and future operating requirements before completing a purchase.

These ownership-transition estimates come from McKinsey’s February 2026 report, The Great Ownership Transfer: A New Era of Business Stewardship. They represent projected transitions over the coming decade, not businesses currently listed for sale.

The Great Ownership Transfer: Why Millions of Businesses Are Approaching a Turning Point

America’s small-business economy is approaching a generational transition.

According to McKinsey, approximately 52% of U.S. small and medium-sized businesses are owned by individuals who are within ten years of retirement, compared with 35% in 2005.

The report estimates that approximately six million businesses with fewer than 500 employees will face ownership transitions by 2035. More than one million are considered viable candidates for sale or employee ownership.

These businesses represent much more than storefronts and company names.

They include local manufacturers, construction companies, professional-service firms, restaurants, retailers, distributors, and countless other enterprises that support communities throughout the country.

Many have spent decades developing customer relationships and building reputations that would be difficult for a new competitor to replicate.

Yet when their owners retire, someone must decide what happens next.

Some businesses will remain within their founding families. Others may be transferred to employees or sold to competitors. Some will attract first-time entrepreneurs looking for an established company to operate.

And others may close because a suitable successor cannot be found.

The opportunity isn’t simply that millions of businesses could change hands. It’s that existing customer relationships, equipment, operating systems, and institutional knowledge could be transferred to new owners rather than disappearing.

For aspiring entrepreneurs, that introduces a question worth considering:

Why build every part of a new business from scratch when an established company might already provide the foundation you’re looking for?

Buying a Business Instead of Starting One: A Different Path to Entrepreneurship

Smart Retailers Know: Small Business Saturday 2025 Is the Moment to Show Up Big

Starting a new business requires more than filing formation documents and opening a bank account.

An entrepreneur must develop a product or service, attract customers, establish supplier relationships, create operating procedures, and determine whether the business can generate enough revenue to survive.

Those challenges can take years to overcome.

Buying an established business changes the starting point.

Rather than creating every component of the company, the buyer acquires an existing operation with a history that can be evaluated.

Consider the differences:

Starting a new business	Buying an established business
Build a customer base	May acquire existing customers
Establish brand recognition	May acquire an established reputation
Develop operating procedures	May inherit existing systems
Recruit and train employees	May retain an experienced workforce
Establish supplier relationships	May continue existing relationships
Develop a revenue history	Can review historical financial performance
Requires startup capital	Requires acquisition capital and ongoing operating funds

Of course, an existing business doesn’t guarantee success.

Customers may leave after an ownership change. Employees may choose not to stay. Equipment may require replacement, and historical profitability may depend heavily on the departing owner’s personal relationships.

The advantage is not the elimination of business risk. It is the opportunity to evaluate an existing operation before deciding whether to invest in it.

What Is Actually Happening in the Business-for-Sale Market in 2026?

The anticipated ownership transition is a long-term trend, but there are already signs that business acquisition is attracting a changing group of entrepreneurs.

According to BizBuySell’s first-quarter 2026 Insight Report, 49% of surveyed small-business buyers identified themselves as people transitioning away from corporate careers, up from 44% in the previous quarter.

The report also recorded a median sale price of $350,000 and median annual cash flow of $165,256 among the transactions it tracked during the quarter.

These figures describe transactions reported through BizBuySell’s marketplace and broker network, not every small business sold in the United States.

The reported cash-flow figure should also not be confused with the amount a new owner can expect to take home. Actual earnings depend on financing costs, taxes, reinvestment needs, owner compensation, and the business’s future performance.

Nevertheless, the data illustrates that purchasing an operating business is not exclusively an activity for large corporations or private equity firms.

Individual entrepreneurs are participating in this market, too.

Are more businesses actually changing hands?

Not every indicator points toward an immediate increase in completed acquisitions.

BizBuySell reported that 2,117 businesses changed hands through its tracked market during the second quarter of 2026, a 10% decline from the previous year.

Its report also described buyers becoming more selective as financing conditions and scrutiny of business performance affected transactions.

This is an important distinction.

A growing number of owners approaching retirement does not automatically mean that every business will be available, affordable, or financially attractive.

Finding the right opportunity still requires research, preparation, and patience.

What Types of Established Businesses Could Be Worth Exploring?

Junget A/S tager første skridt mod Skandinavien med opkøb i Norge

The ownership-transition story extends far beyond restaurants and retail stores.

For an entrepreneur considering an acquisition, the important question is not simply which industries are growing.

It is which types of businesses match the buyer’s experience, available capital, and willingness to manage day-to-day operations.

1. Local service businesses

HVAC companies, plumbing businesses, landscaping services, commercial cleaning companies, and property-maintenance firms may have recurring customers and established local reputations.

An entrepreneur with relevant experience might consider purchasing a company whose owner is preparing to retire.

However, buyers should examine licensing requirements, employee retention, service contracts, and the company’s dependence on the departing owner.

2. Small manufacturing and distribution companies

An established manufacturer may have specialized equipment, trained employees, supplier relationships, and long-standing commercial customers.

Acquiring such a company could provide an opportunity to enter an industry without developing an entire manufacturing operation from the ground up.

Buyers should investigate equipment condition, capital requirements, customer concentration, inventory, and whether specialized technical expertise is essential to operating the company.

3. Professional-service businesses

Bookkeeping firms, marketing agencies, IT service providers, and other specialized companies may offer opportunities for entrepreneurs with relevant professional experience.

The central consideration is whether clients are loyal to the business itself or primarily to the departing owner.

Professional licensing and client-contract transfer requirements may also affect a transaction.

4. Established retail and community businesses

Independent hardware stores, specialty retailers, neighborhood shops, and other local businesses may have valuable locations, recognizable brands, and established customer relationships.

Buyers need to evaluate inventory, lease terms, competition, operating margins, and how consumer purchasing habits are changing.

The right acquisition is not necessarily the business with the highest revenue or the most recognizable name.

A smaller company with dependable customers, manageable expenses, and operations that match the buyer’s capabilities may offer a very different ownership experience from a larger business that requires substantial additional investment.

Where Do You Find Established Businesses Whose Owners Are Ready to Sell?

Not every business approaching an ownership transition has a public listing.

Some owners work with business brokers. Others explore a sale privately through accountants, attorneys, industry contacts, or existing business relationships.

For prospective buyers, there are several avenues worth investigating.

Business-for-sale marketplaces

Platforms such as BizBuySell and BizQuest provide listings across industries and geographic markets.

These marketplaces can help prospective buyers understand asking prices, available business categories, and the financial information sellers are willing to disclose.

Business brokers

Business brokers represent owners who are considering selling their companies and help coordinate potential transactions.

They may provide access to businesses that are not widely advertised, although buyers should understand whom the broker represents and how the broker is compensated.

Industry and professional networks

Trade associations, local chambers of commerce, accountants, and attorneys may be familiar with owners exploring succession options.

These relationships can be particularly useful for entrepreneurs interested in a specific industry or geographic market.

Direct conversations with business owners

An entrepreneur interested in a particular industry may approach an owner to explore whether a future ownership transition is being considered.

A business owner who is not actively advertising a company for sale may still be interested in discussing succession planning.

However, approaching an owner is only the beginning. Both parties must determine whether the business, purchase price, financing, and proposed transition make sense.

Can You Buy an Established Business Without Paying the Entire Purchase Price Upfront?

Business Loan Vs. Asset Finance? Smart 2026 Funding Choices

One of the biggest barriers to buying an established business is financing.

A company with equipment, inventory, employees, customers, and consistent revenue may require a substantial initial investment.

But buyers do not necessarily need to pay the entire purchase price from personal savings.

Depending on the transaction, financing may involve a combination of personal capital, conventional lending, seller financing, and SBA-backed loans.

SBA 7(a) loans: Financing a business acquisition

The U.S. Small Business Administration’s 7(a) loan program can support complete or partial changes of business ownership.

The program has a maximum loan amount of $5 million, although individual loan approval depends on eligibility, lender underwriting, repayment ability, and applicable SBA requirements.

An SBA loan is not a government grant or a guarantee that a particular acquisition will be approved.

The buyer must demonstrate that the proposed transaction meets the program’s requirements and that the business can reasonably support repayment.

For current eligibility requirements and financing information, visit the SBA’s official 7(a) loan program page .

Seller financing: When the departing owner helps finance the purchase

Another possible arrangement is seller financing.

Instead of receiving the entire purchase price at closing, the seller agrees to accept a portion of the payment over time under negotiated terms.

For example, a business owner might sell a company for $400,000, receive $300,000 at closing, and finance the remaining $100,000 through a promissory note.

The buyer would then make payments according to the agreement.

This is an illustrative example, not a typical or guaranteed financing arrangement.

Seller financing can help bridge a funding gap, but both parties must carefully evaluate repayment terms, security interests, default provisions, and the financial risks involved.

When an SBA-backed loan is also part of the transaction, seller financing must comply with applicable lender and SBA requirements. It should not be assumed that a seller-financed amount will automatically satisfy the buyer’s required equity contribution.

Before Buying a Business, Find Out What You’re Really Purchasing

An established business may look attractive from the outside.

It has employees, customers, equipment, and a history of generating revenue.

But what happens when you examine the financial records?

A company reporting $1 million in annual sales might appear successful, yet its operating expenses, debt obligations, and capital requirements could leave very little cash available to its owner.

A business might also depend on one major customer, an aging piece of equipment, or the personal relationships of the owner who is preparing to retire.

This is why due diligence is essential.

The SBA recommends reviewing financial information, contracts, leases, inventory, licensing requirements, and other operational details when evaluating an existing business.

Business Acquisition Due Diligence: A Quick-Reference Checklist

What to review	Why it matters
Financial statements and tax returns	Verify historical revenue, expenses, and profitability.
Bank records and cash flow	Determine whether the company generates sufficient cash to support operations and acquisition financing.
Outstanding debts and liabilities	Identify financial obligations that may affect the purchase.
Customer relationships	Determine whether revenue depends heavily on a few customers or the departing owner.
Employees and management	Evaluate staffing needs and the company’s ability to operate after the ownership transition.
Equipment and inventory	Identify potential replacement costs, obsolete inventory, and future capital requirements.
Contracts, leases, and licenses	Determine which agreements and authorizations can continue after the sale.
Legal and tax obligations	Investigate pending litigation, liens, unpaid taxes, and other potential liabilities.
Owner transition arrangements	Determine whether the seller will provide training, introductions, or other transition assistance.

A qualified accountant and business acquisition attorney can help a buyer evaluate the transaction and identify issues that might not be obvious from the seller’s financial summary.

The objective is to understand not only what the business earned in the past, but also what it may cost to operate after ownership changes.

Do You Need to Form a New LLC When Buying an Existing Business?

This is an important consideration for entrepreneurs exploring business acquisitions.

Buying a business does not automatically require forming a new limited liability company.

The appropriate structure depends on what is being purchased, the existing company’s legal structure, financing requirements, tax considerations, and the buyer’s circumstances.

Two common acquisition approaches illustrate the differences.

Asset purchase	Equity purchase
The buyer purchases specified business assets, potentially through a newly formed LLC or another entity.	The buyer acquires ownership interests in the existing company.
Assets may include equipment, inventory, intellectual property, and certain contractual rights.	The existing legal entity generally continues operating under its current structure.
Contracts, licenses, and permits may require separate assignment, consent, or new applications.	Existing contracts and licenses may remain with the entity, subject to change-of-control and other requirements.
Certain liabilities may remain with the seller, although successor-liability rules and transaction terms can create exceptions.	The acquired entity generally retains its existing obligations and liabilities.

For example, an entrepreneur purchasing the assets of a retiring business owner might establish a new LLC to complete the acquisition and operate the business going forward.

Alternatively, a buyer might acquire the membership interests of an existing LLC, allowing the legal entity to continue under new ownership.

Neither structure is automatically appropriate for every transaction.

Will you need a new EIN after purchasing a business?

The answer depends on the transaction and the legal and tax structure of the business.

A newly formed entity may need its own Employer Identification Number. In other situations, an existing entity may retain its EIN after a change in ownership.

The IRS provides specific rules for different entity types and ownership changes.

For entrepreneurs considering a new entity, MyUSACorporation offers services related to LLC formation and obtaining an EIN .

The appropriate formation and registration steps should be determined before completing the acquisition, with guidance from qualified legal and tax professionals.

What Does This Ownership Transition Mean for Existing Small-Business Owners?

The opportunity is not limited to first-time entrepreneurs.

An existing small-business owner might consider acquiring another company to expand into a new geographic market, add complementary services, obtain specialized equipment, or establish relationships with additional customers.

Imagine a successful local landscaping company purchasing a retiring competitor.

The acquisition could provide additional service routes, equipment, experienced employees, and an established customer base.

Or consider a bookkeeping company acquiring a retiring owner’s client portfolio, subject to client consent and the terms of the transaction.

Rather than developing every new customer relationship individually, the acquiring company may be able to expand through an established operation.

However, growth through acquisition can also introduce financial strain, employee-management challenges, and operational complexity.

A buyer must determine whether the combined businesses can operate effectively and whether the acquisition price is justified by the value being acquired.

For existing business owners, acquisition is another possible growth strategy—not a substitute for evaluating the economics of the transaction.

What If You’re the Business Owner Preparing to Retire?

The active senior, 77-years-old, African-American businesswoman, business owner, teaching the new employee, the 18-years-old Caucasian white girl, how to use the computerized cash register in the small local restaurant.

The other side of this story deserves equal attention.

For an entrepreneur who has spent decades building a company, selling the business may represent one of the most significant financial decisions of a lifetime.

But preparing for a successful ownership transition involves more than finding someone willing to purchase the company.

A prospective buyer will want to understand how the business operates, whether its financial records are reliable, and whether it can continue functioning without the current owner.

Business owners considering retirement can begin by examining several important questions:

Are the company’s financial records organized and current?
Can the business operate without the owner’s daily involvement?
Are customer and supplier relationships documented?
Are key employees prepared to remain after a sale?
Is there an established succession plan?
Has the owner obtained an independent business valuation?
Would a family member, employee, outside entrepreneur, or existing competitor be a potential successor?

The earlier an owner begins preparing, the more time there may be to address issues that could complicate a future sale.

A successful ownership transition can preserve an existing business while providing the departing owner with an opportunity to realize the value of years of work.

Frequently Asked Questions About Buying an Established Business

Is buying an existing business less risky than starting a new one?

Not necessarily. An established company may provide historical financial information, customers, and operating systems that a new business does not have. However, it may also carry existing liabilities, outdated equipment, declining demand, or other problems. The risk depends on the specific business and transaction.

How much money do you need to buy a small business?

There is no universal minimum. Purchase prices vary widely depending on the industry, profitability, assets, location, and other factors. Buyers should budget for the purchase itself, professional fees, working capital, and potential improvements after closing.

Can you use an SBA loan to buy an existing business?

Yes. Qualifying business acquisitions can be financed through the SBA 7(a) loan program. Approval depends on applicable program requirements and the participating lender’s evaluation of the borrower and transaction.

Can you buy a business from someone who is retiring?

Yes. A retiring owner may sell a business to an individual entrepreneur, an existing company, family members, or employees. The transaction can involve business assets or ownership interests, depending on the circumstances.

Do you need an LLC to buy an existing business?

Not always. A buyer may acquire an existing entity or use a newly formed or existing entity to purchase business assets or ownership interests. The appropriate approach depends on the transaction, liability considerations, financing, and applicable legal and tax requirements.

Can you buy a business and keep its existing employees?

Potentially. Employee retention depends on the transaction structure, employment agreements, applicable law, and whether employees choose to remain. Buyers should evaluate staffing and transition plans before closing.

Final Thoughts: America’s Next Generation of Entrepreneurs May Inherit What the Last Generation Built

The next decade could bring a significant change in how Americans become business owners.

For some entrepreneurs, the opportunity will still begin with a new idea, a business plan, and the decision to build a company from the ground up.

For others, the opportunity may already exist.

It could be the local manufacturer whose owner is approaching retirement. The service company with loyal customers but no family successor. The neighborhood business that has operated successfully for decades but needs someone new to lead it forward.

These companies represent years of investment, experience, relationships, and hard work.

Their future will depend on whether the next generation sees value in continuing what previous entrepreneurs created.

Buying an established business is not necessarily easier or less expensive than starting one. It requires capital, research, careful financial evaluation, and a willingness to take responsibility for an existing operation.

But for an entrepreneur with the right experience, resources, and vision, it may provide a different path to business ownership.

The next great American business opportunity may not begin with a groundbreaking idea.

It may begin with a conversation between an owner who is ready to retire and an entrepreneur who is ready to take the company into its next chapter.

Considering Buying or Starting a Business?

Whether you’re building a company from the ground up or establishing a new entity to acquire an existing business, understanding your formation and registration requirements is an important early step.

MyUSACorporation provides business formation, EIN, registered agent, and related business services to help entrepreneurs establish and maintain their companies. Explore MyUSACorporation’s business formation services → establish and maintain their companies. Explore MyUSACorporation (Our Services)

Could The SBA Be Redefining Small Business In 2026

The SBA Is Redefining “Small Business.” Could Your Company Qualify Under the Proposed New Rules?

More than 110,000 additional companies could potentially be classified as small businesses under a sweeping SBA proposal—and the agency is hearing public testimony on the changes tomorrow.

What exactly makes a business “small”?

Ten employees? Fifty? Less than $1 million in annual revenue?

The answer is more complicated than most business owners realize.

For purposes of many federal programs, the U.S. Small Business Administration doesn’t use one universal definition of a small business. Instead, SBA size standards vary by industry and are generally based on either a company’s average annual receipts or number of employees.

And now those rules could be changing.

On August 20, 2026, the SBA proposed a major overhaul of the system used to determine which companies qualify as small businesses. The proposal would simplify industry classifications and increase size thresholds in numerous industries.

According to the SBA, the changes could bring more than 110,000 additional employer firms into the small-business category.

And this isn’t an old regulatory proposal gathering dust in Washington.

Tomorrow, September 17, the SBA will hold a virtual public forum to hear testimony about the proposed changes. Testimony from the forum will become part of the official administrative record that SBA says it will consider when developing the final rule.

For growing companies that have assumed they’re simply “too big” to qualify as small businesses, this may be a development worth watching closely.

🔎 At a Glance

What’s happening?
The SBA has proposed a significant overhaul of its small-business size standards.

Are the new standards in effect?
No. These remain proposed rules as of September 2026.

How many companies could be affected?
SBA estimates that more than 110,000 additional employer firms could be classified as small businesses under the proposal.

What’s changing?
The proposal would simplify industry classifications, raise numerous size thresholds and change the methodology SBA uses to evaluate industry market size and competition.

Why does it matter?
A company that is too large under today’s standard could potentially qualify as small under a revised standard if the proposal becomes final.

What’s happening next?
SBA is holding a virtual public forum on September 17, 2026, to gather testimony before developing the final rule.

What Does the SBA Actually Mean by a “Small Business”?

This is where things get interesting.

There isn’t one revenue or employee number that separates every small business from every large business.

SBA size standards vary by industry and are generally based on either the number of employees a company has or its average annual receipts.

The applicable standard is tied to the company’s North American Industry Classification System (NAICS) code.

That means a company employing several hundred people might still qualify as small in one industry, while a company with much lower revenue could exceed the small-business threshold in another.

For federal contracting purposes, SBA generally averages annual receipts over the company’s latest five completed fiscal years.

Employee-based standards generally look at the average number of employees during each pay period over the company’s latest 24 calendar months.

There is another important factor business owners sometimes overlook:

Affiliates can count.

When determining size, SBA rules can require a business to include employees or receipts from affiliated companies. Affiliation generally involves the power of one business or person to control another, whether or not that power is actually exercised.

So looking at your company’s latest annual revenue or simply counting the employees on today’s payroll may not give you the complete answer.

What Is the SBA Proposing to Change?

The August proposal would make some substantial changes to the current system.

1. Fewer Size-Standard Categories

SBA is proposing a move toward broader four-digit NAICS classifications where appropriate, rather than relying as extensively on separate six-digit classifications.

According to the agency, this would reduce the number of size-standard categories from nearly 1,000 to 338 broader industry groupings.

That’s a reduction of roughly 65%.

The idea is to make determining small-business status simpler while creating standards that SBA believes better reflect today’s competitive markets.

2. Much Higher Limits in Some Industries

This may be the biggest part of the story for growing businesses.

Some proposed size thresholds aren’t increasing by a few percentage points. They’re increasing substantially.

Consider several examples supplied directly by SBA:

Industry	Current threshold cited by SBA	Proposed threshold
Semiconductor manufacturing	1,250 employees	2,800 employees
Shipbuilding	1,300 employees	2,300 employees
Oil drilling	1,000 employees	2,650 employees
Support activities for animal production	$11 million receipts	$71 million receipts

A semiconductor manufacturer employing 2,000 people doesn’t sound like a “small business” in everyday conversation.

Under the proposed SBA standard, however, it potentially could be.

And that’s where understanding the purpose of these standards becomes important.

How Can a Company With 2,000 Employees Be a “Small Business”?

Because “small” is relative to the industry in which a company competes.

A 2,000-employee manufacturer might sound enormous compared with a local contractor, accounting practice, retailer or consulting firm.

But that manufacturer may be competing against multinational corporations employing tens of thousands of people and generating billions of dollars in revenue.

SBA size standards aren’t designed simply to determine whether a company feels small.

They’re intended to establish the maximum size at which a business can still be treated as small within its particular industry for applicable federal programs.

That’s why the thresholds can vary so dramatically.

And it’s one reason SBA says the standards need to evolve as industries grow and change.

SBA Is Also Rethinking How Markets Are Defined

Another interesting part of the proposal involves the geographic scope of competition.

Not every industry competes in the same kind of market.

A technology company might compete for customers nationally—or internationally—while businesses in some retail, construction and service industries may compete primarily within much smaller geographic markets.

SBA’s proposed methodology attempts to account for differences like these when evaluating industry market size and competitiveness.

That does not necessarily mean two otherwise identical companies will receive different size standards simply because they’re located in different states.

Instead, geographic competition becomes part of the methodology SBA can use when determining the characteristics and competitive environment of an industry.

The broader objective is to make the definition of “small” better reflect how businesses actually compete.

Why Being Classified as “Small” Can Be a Big Deal

This isn’t simply about what label appears next to a company’s name.

SBA size standards help determine whether businesses are eligible to participate in certain federal programs and compete for federal contracts reserved or set aside for small businesses.

The proposed changes could therefore make additional businesses eligible to pursue SBA lending programs, federal small-business contracting opportunities and other programs—provided they meet all the other requirements of the particular program.

That’s an important distinction.

Being classified as small doesn’t automatically guarantee a loan, government contract or access to every SBA program.

But it can open the door to opportunities that otherwise wouldn’t be available.

And that creates an intriguing possibility.

A company could potentially grow out of “small business” status—and then qualify again.

Imagine a successful business that gradually exceeds its industry’s existing SBA size threshold.

As a result, the company loses its small-business classification for certain federal purposes.

If SBA subsequently raises that industry’s threshold substantially, the same company could potentially fall within the definition again.

That’s why these proposed changes deserve attention from established companies as well as startups.

Could Your Business Suddenly Become “Small”?

Potentially.

SBA says the proposed changes would add more than 110,000 employer firms to the small-business population.

Among the approximately 6.3 million employer firms in the United States, SBA describes that as roughly a 1.8% expansion.

For a very small company with five employees, the new standards may not make much practical difference. That business probably already falls well below its applicable size threshold.

But the proposal becomes much more interesting for companies that:

🔹 Have grown close to or beyond their existing SBA size limit

🔹 Operate in industries receiving substantially higher proposed thresholds

🔹 Want to pursue federal contracting opportunities

🔹 Previously lost small-business eligibility because of growth

🔹 Have expanded through acquisitions or affiliated businesses

🔹 Operate across multiple business activities or NAICS classifications

For those businesses, the government’s definition of “small” could have very real financial consequences.

📅 Why September 17 Matters

Before anyone begins planning around the proposed standards, there’s an important point to remember:

The rules aren’t final.

Tomorrow, Thursday, September 17, 2026, the SBA will hold a virtual public forum specifically addressing the proposed size standards and revised methodology.

The SBA says testimony presented at the forum will become part of the administrative record used in developing the final rule.

The agency is particularly encouraging participation from businesses that currently sell to the federal government and organizations involved in providing companies access to capital.

Written comments can also be submitted through the federal rulemaking process under RIN 3245-AI67.

That’s important context because the final standards could differ from what is being proposed today.

For business owners, tomorrow’s forum is another step in the process—not the finish line.

⚡ Pro Tip: Find Your NAICS Code Before You Assume You Don’t Qualify

One of the easiest mistakes a business owner can make is assuming “small business” has one universal definition.

It doesn’t.

Your applicable NAICS classification can determine the size standard against which your business is measured.

Businesses can also conduct activities that fall under multiple NAICS codes, while individual federal contracting opportunities are assigned particular industry classifications.

Before deciding you’re too large—or assuming you’re small enough—identify the relevant NAICS code and check the applicable SBA standard.

The SBA provides an official Size Standards Tool specifically for this purpose.

A Simple Example

Suppose a company has grown rapidly during the past several years.

It now has:

Annual receipts: $24 million
Employees: 140
Industry: A sector using a receipts-based SBA standard

Is it still a small business?

There’s not enough information to answer that question.

You would first need to identify the applicable NAICS classification and its corresponding size standard.

Then you would need to calculate receipts according to SBA rules rather than simply looking at this year’s sales.

And if the business has affiliates, their receipts may also have to be included.

That’s why a company shouldn’t automatically assume it’s too large—or small enough—to qualify.

What Should Business Owners Do Right Now?

The proposal isn’t final, so companies shouldn’t make eligibility decisions using the proposed thresholds yet.

But that doesn’t mean there’s nothing to do.

1. Identify Your NAICS Classification

Determine which NAICS codes accurately describe your company’s products or services.

2. Check Your Current SBA Size Standard

Use the official SBA Size Standards Tool instead of relying on a generic definition of small business.

3. See How Close You Are to the Current Limit

Businesses approaching or recently exceeding their existing threshold have an obvious reason to monitor the rulemaking process.

4. Look at the Proposed Standard for Your Industry

Some of the proposed increases are significant. Companies that previously dismissed SBA opportunities because they were too large may want to revisit that assumption if the proposal becomes final.

5. Review Potential Affiliations

Subsidiaries, ownership structures and relationships with other businesses can affect SBA size calculations.

6. Follow What Happens After the September 17 Forum

The testimony and written comments submitted during the rulemaking process will be considered by SBA before it develops the final rule.

Until that happens, today’s standards remain the ones businesses should use.

Don’t Confuse “Proposed” With “Approved”

This distinction deserves emphasis.

A headline saying the SBA is “redefining small business” can easily sound as though the changes have already happened.

They haven’t.

SBA announced the proposed overhaul on August 20, 2026.

The agency is still accepting and evaluating input, including testimony at the September 17 public forum.

Until a final rule is issued and becomes effective, businesses should continue using the currently applicable SBA size standards when determining their eligibility.

Frequently Asked Questions

Is every business with fewer than 500 employees considered a small business?

No.

You may frequently see 500 employees used as a broad statistical definition of small business, but SBA program and federal contracting eligibility relies on industry-specific size standards.

Are SBA size standards based on revenue or employees?

Both can be used.

Which measurement applies depends largely on the company’s industry and NAICS classification.

Do affiliated companies count toward my size?

They can.

SBA rules require businesses to account for affiliates when calculating size where the affiliation rules apply. That can mean including affiliated employees or receipts.

Have the new 2026 SBA size standards taken effect?

No.

As of September 16, 2026, the major changes announced August 20 remain proposed.

What happens on September 17?

SBA will hold a virtual public forum to hear testimony concerning the proposed size standards and revised methodology.

According to SBA, testimony will become part of the administrative record and will be considered along with written comments when the agency develops its final rule.

Could a company that’s currently too large become eligible?

Potentially.

Because many proposed thresholds would increase, some companies that exceed today’s standards could fall within a new threshold if the applicable proposal becomes final.

Eligibility would still depend on the final rule, the company’s industry, applicable size calculations, affiliation rules and the requirements of the particular federal program or contract.

The Bigger Picture: Growth Shouldn’t Automatically Close the Door

Perhaps the most interesting part of the SBA proposal is what it says about the changing scale of American business.

A company can grow considerably and still be relatively small compared with the dominant competitors in its industry.

That’s particularly true in capital-intensive industries where businesses need significant workforces, equipment, technology and revenue simply to compete.

SBA’s proposal attempts to account for that changing reality while simplifying a classification system that has grown increasingly complex.

For entrepreneurs and established business owners, there’s also a practical lesson:

Don’t assume your company is too large—or too small—for an opportunity until you check.

Industries change. Businesses grow. Government standards change with them.

And if the SBA ultimately adopts these expanded standards, more than 110,000 additional employer businesses could find themselves looking at opportunities that weren’t previously available to them.

For some growing companies, being redefined as “small” could turn out to be a very big deal.

Official Government Resources

U.S. Small Business Administration — Proposed Size Standards Overhaul
SBA’s August 20, 2026 announcement explains the proposed changes, the 110,000-business estimate, industry examples and the move toward broader NAICS classifications.

U.S. Small Business Administration — September 17 Public Forum
SBA’s official announcement explains the public testimony process and how comments will be considered when developing the final rule.

U.S. Small Business Administration — Size Standards Tool
Business owners can use SBA’s official tool to check whether their business currently qualifies as small for government contracting purposes.

This article is intended for general informational purposes and should not be considered legal, financial or government-contracting advice.