Navigating a Buyer's Market: Key Takeaways from the Q2 2025 BizBuySell Report for ETA Investors

Staying ahead of market shifts is crucial for success. The latest BizBuySell Insight Report for Q2 2025, a key barometer for the U.S. small business economy, reveals a landscape shaped by new economic policies and evolving buyer behavior. The report, which analyzes data from approximately 50,000 business listings and sales, shows a market pivoting in favor of well-prepared buyers. At Agame Search Fund, we believe a data-driven understanding of these trends is essential for de-risking acquisitions and building investor trust. This article distills the critical insights from the report and explains their direct relevance to the ETA journey. The Macro Environment: A Shift to a Buyer's Market The report indicates a modest cooling in deal-making, with 2,342 businesses sold in Q2 2025, a 4% decrease year-over-year. This slowdown is attributed to economic uncertainty stemming from newly imposed tariffs and persistent inflation, which has caused some buyers to hesitate. For sellers, these pressures are mounting. Nearly half (46%) report that tariffs have increased their costs, while 66% have had to raise prices in response to inflation. This challenging environment is creating a significant opportunity for savvy ETA searchers. According to the report, 40% of business brokers now believe the market favors buyers, compared to just 26% who see an advantage for sellers. For prepared searchers, this means more negotiating power and a greater potential to find value. The Flight to Quality: Recession-Resilience is Paramount In this uncertain climate, buyers are overwhelmingly prioritizing stability. The report found that 73% of buyers are focusing on recession-resistant businesses, with a strong preference for the service sector. This trend is reflected in sector-specific performance: Service Sector: Transactions climbed 7% as buyers targeted businesses with steady demand, such as home services, healthcare, and logistics. Retail Sector: Deal volume rose 2%, with the median sale price jumping 13% as buyers paid a premium for essential businesses like grocery and convenience stores. Manufacturing & Restaurants: Conversely, sectors highly vulnerable to tariffs and inflation saw significant declines, with manufacturing transactions dropping 28% and restaurant deals falling 16%. This data validates a core tenet of the ETA model: acquiring durable, non-cyclical businesses with consistent cash flow. As broker Lee Sheaffer of BizReady, Inc. notes, "Buyers are competing for the best businesses, and they sell pretty quickly for premium prices now". The New SBA Hurdle: Navigating Stricter Lending Rules Perhaps the most significant development is the introduction of new SBA lending rules that roll back more lenient, Biden-era policies. These changes are designed to reduce lender risk but create major hurdles for buyers. Key changes include: Full Standby for Seller Notes: Seller financing used as part of the buyer's equity injection (up to 50% of the required 10%) must now be on "full standby." This means the seller receives no payments until the SBA loan is fully repaid, effectively turning it into a zero-interest, 10-year loan. Personal Guarantees for Equity Rollovers: Any seller retaining even a small equity stake in the business must now personally guarantee the entire SBA loan. These new regulations are already impacting the market. The average time a business stays on the market has increased by 12 days, and 41% of brokers report delays caused by these policies. For an unprepared searcher, these changes can be deal-breakers. As broker Mark Kincannon of Resolution Equity Partners stated, "SBA lending has become a real challenge with new federal regulations". Why This Matters for Investors The Q2 2025 BizBuySell report paints a clear picture: the ETA landscape is becoming more complex, but it is ripe with opportunity for those who are prepared. The market now rewards deep industry knowledge, rigorous diligence, and a mastery of creative, compliant deal structuring. At Agame Search Fund, this is where we excel. We guide our entrepreneurs through the intricate new lending environment, help them identify resilient businesses in attractive sectors, and empower them to negotiate from a position of strength. This disciplined, expert-led approach is how we build trust with our investment partners and deliver high-quality, vetted opportunities in any market cycle. ---------------------------------------------------------------------- Do you know a business owner aged 50–70 looking to retire? Email redacted referrals earn generous rewards! Subscribe on LinkedIn https://www.linkedin.com/build-relation/newsletter-follow?entityUrn=7332173802094678016 for more insights on ETA, real-world case studies, and expert advice on acquiring and operating businesses. #SearchFund #EntrepreneurshipThroughAcquisition #PrivateEquity #ETA #BusinessAcquisition #ValueCreation #AgameSearchFund #OperationalExcellence