FOR SELLERS
Who Is Buying Businesses in 2026? Not Just Private Equity
Most owners have no idea who would buy their business. Competitors, first-time owners with SBA loans, search funds, sponsors and family offices each look for different things. Here is what they want and how to position for each.
Who is out there, what they look for, and what you can do about it.
Most owners have no real picture of who would buy their business. That’s normal. You sell once, so there’s no reason you’d know. The usual guess is private equity, because that’s what the news covers. But who is buying businesses in 2026 is a wider group, and each kind of buyer is shopping for something different.
Axial, a marketplace for lower-middle-market deals, reported that private equity and independent sponsors made up 61% of the deals that closed on its platform in 2021, and 45% in 2025 (Axial, February 2026). That covers all deal sizes, so it can’t tell you what happens at your size. It does show the buyer may not be a fund.
Below are the types you’re most likely to meet. For each one: who they are, what they look for, and how to position your business. You won’t pick your buyer. But your business can look good to more than one of them.
I. The Company Already in Your Industry
A strategic buyer is a business that already operates in your industry: a competitor, a supplier or a customer.
What they look for. Lutz, an accounting and advisory firm, says strategic buyers are usually trying to enter new markets, widen what they sell, or pick up specialized skills and people. Because they can combine operations, they can often pay a premium. Axial’s interviews with investment bankers (2018, updated 2020) found they worry less about customer concentration, since their own customer base spreads the risk, and may accept a thinner management team, since they have people to move in.
How to position yourself. Show what they can’t easily build themselves: customers, skilled staff, a location, a certification, a process that works. Be ready for sharp questions, because they know what normal looks like in your industry. And protect yourself. Lutz warns that when the buyer is a direct competitor, protecting sensitive information becomes a major concern. Get a confidentiality agreement signed first and share in stages.
On financing, our SBA article notes a buyer already in the industry can qualify for a loan at a lower coverage ratio (1.15x) than a first-time owner (1.25x).
II. The First-Time Owner Using an SBA Loan
This is someone buying a business to run it themselves, usually borrowing part of the price through an SBA-backed loan. We can’t tell you what share of deals they make up, but their lender’s checklist is public.
What they look for. Under the rules that took effect October 1, 2026:
- Debt coverage of at least 1.25x, shown on your last fiscal year, not on projections.
- Three years of filed tax returns, with add-backs documented.
- A business that doesn’t depend entirely on the owner’s personal relationships.
- A lender-ordered Quality of Earnings report on purchases of $3 million or more.
- Any seller note held in full standby for the life of the loan.
How to position yourself. Make sure your tax returns and your financial statements tell the same story, and that every add-back has paper behind it. Show the business can run without you. And plan on a longer handover than you might expect. We go through the details in what SBA lenders are looking for.
III. The Search Fund
A search fund is one person, sometimes two, who raises money from investors to find one company and then run it as CEO. Stanford’s 2026 Search Fund Study has tracked more than 850 of them since 1996. About 58% have ended up buying a company, the median price for companies bought in 2024 and 2025 was $16 million, and the typical search takes around 20 months (Stanford GSB, July 2026).
What they look for. The IBBA, the business brokers’ trade association, describes the typical target as a profitable, often founder-led business with room to grow, with $1.5 million to $5 million of earnings. A checklist published by one searcher on Searchfunder.com adds repeat customers, no single customer that is too large, and no dependence on the owner’s personal relationships. Treat that list as one searcher’s view, not an industry standard.
How to position yourself. Show the repeat business, show how your customers are spread out, and show that someone besides you holds the relationships. The IBBA also notes that traditional search funds usually raise the purchase money after the letter of intent is signed, so ask early where the money stands. Search funds are usually not the highest bidders, but the IBBA says they offer flexible structure and, if you don’t want to stay long, a buyer who will run the business themselves. Stanford’s median price is well above many of our clients’ businesses, so this is a buyer to understand, not one to count on.
IV. Independent Sponsors and Private Equity
Independent sponsors raise money for each deal separately. McGuireWoods, a law firm, reported from its 2023 independent sponsor conference that these deals can include bigger seller rollovers, seller notes and earnouts, and can take longer to close because investors had become more cautious. Ask early whether the money is committed or still being raised, and read our piece on earnouts before you agree to a held-back price.
Private equity funds invest money from committed investors and run on a fund schedule, which we explain in Your Buyer Has a Clock.
What they look for. Wipfli, an accounting and advisory firm, lists five things: a strong management team, a mission-critical business customers can’t easily replace, long-term market momentum, room to grow, and a diversified customer base. Axial’s banker interviews add steady, predictable revenue.
How to position yourself. The biggest one is management. These buyers usually don’t run the business day to day, so show who does. Spell out why customers would stay, where growth could come from, and how your revenue is spread. If you’d stay and take part of the price as equity in the new company, know your answer before the first call.
V. Family Offices
A family office invests a family’s own money.
What they look for. Two lawyers at Greenberg Glusker wrote in 2025 that family offices put weight on strategic fit, culture and shared values, industry knowledge and long-term growth. They also say a family office has no required end date for owning the company, is often more flexible on structure, rarely charges the company a management fee, and relies less on debt than a fund does, which can mean more certainty the deal closes.
How to position yourself. Tell your story. This is the buyer where your team, your history and what you want for the business afterward matter most. Be clear about what you want after closing, whether that’s cash, a continuing role or protection for your people, and ask what the family did with its last acquisition.
VI. Who Is Buying Businesses: How to Get Ready
Every buyer above checks some of the same things. Get these right and you look good to all of them.
Get three years of clean, filed financials.
Lenders require them and investors ask for them. Every buyer on this list starts by checking your numbers against your tax returns.
Show the business runs without you.
Every buyer here either has to run the company or hire someone who will. Written procedures, a clear list of who does what, and a second person who knows your key customers all make that easier.
Spread your customers out, or show why they stay.
Customer concentration came up with nearly every buyer type above. If one customer is a big share of your sales, show how long they’ve stayed and why. Start widening the base well before you sell.
Decide what you want after closing.
Cash at closing, a role for a while, equity in the new company, your team staying together. Different buyers offer different mixes, and you’ll negotiate better if you know your own answer first.
Run a process.
Having more than one type of buyer at the table is how you find out what the business is worth to each. A buyer who found you without a process has nothing to compete against.
Conclusion: Get Ready Before You Know the Buyer
You probably don’t know yet who your buyer will be, and that’s fine. A competitor, a first-time owner with a loan, a search fund, a sponsor or a family office each want something different from your business. Learn what they look for now, and you can start getting ready for them.
This article is general information, not legal, tax or investment advice.
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