Overall M&A transaction value rose 65% year over year in the lower middle market, driven by private equity firms deploying capital that had been held back during the 2023-2024 interest rate peak. PE groups are concentrating on businesses with $2 million to $25 million in EBITDA -- a range small enough to avoid bulge-bracket competition but large enough to support institutional due diligence processes.
45% of business brokers report that SBA and conventional lending conditions have tightened compared to 12 months ago, according to IBBA survey data. Higher documentation requirements and longer approval timelines are extending deal cycles, particularly for buyers in the $500K to $2M purchase price range who depend on SBA 7(a) financing.
Strategic buyers are returning to active acquisition postures after two years of integration focus. Companies in professional services, distribution, and technology-enabled services are acquiring for customer base expansion, geographic coverage, and talent -- in that order by deal frequency.
CGK Business Sales 2026 buyer priority research shows that documentation quality now ranks as the top decision factor among institutional buyers, above price and above seller terms. Buyers who encounter incomplete financial records are withdrawing from LOI negotiations at a higher rate than in prior cycles.
Brokers expanding their digital footprint through SEO and content marketing are reporting measurable increases in seller inquiries. Sellers increasingly research brokers online before making first contact, and brokers with visible, content-rich websites are converting those visits into listings at a higher rate than brokers relying on referral networks alone.