A total of 2,345 small businesses were bought and sold in the first quarter of 2026, generating a combined enterprise value of approximately $2 billion, according to BizBuySell's quarterly insight report. The market reflected a growing divide between strong-performing businesses attracting premium valuations from increasingly sophisticated buyers and flat or declining businesses facing sharply softer demand.
Manufacturing was the most active sector, with Q1 transactions rising 16 percent year-over-year. Service businesses maintained strong buyer interest, particularly in home services, healthcare services, technology-enabled operations, and sustainability-focused firms.
Financing conditions remained a notable headwind, with 45 percent of business brokers reporting that current lending terms are making deals harder to close. New SBA guidance taking effect in March 2026 requires all company owners seeking 7(a) and 504 loans to be US citizens. Seller financing continued to fill the gap, with 61 percent of buyers requesting seller-financed structures.
Valuation trends diverged sharply along performance lines. Businesses with strong recurring revenue and demonstrated cash flow growth commanded higher multiples, while deals involving weaker performers required deeper discounts to attract buyer interest. The overall market remained active but increasingly selective.
Source: BizBuySell -- https://www.bizbuysell.com/insight-report/