Interest rates, lending rules, and other things you can't control

The short version

• Most buyers of small businesses borrow to buy. What they can borrow shapes what they can pay.
• When interest rates rise, loan payments rise, and the price a business can support falls.
• SBA lending rules changed on October 1, 2026. Several changes affect sellers.
• You cannot control these forces. You can control how ready you are when the timing suits you.

Interest rates

A buyer's loan payment depends on the interest rate. At a higher rate, the same earnings support a smaller loan. A smaller loan means a lower price, unless the buyer brings more cash.

Lenders test whether the business earns enough to cover its loan payments with room to spare. Lesson 3.4 explains that test. When rates move, the price that passes the test moves with them.

SBA lending rules

Many buyers of businesses your size use loans guaranteed by the U.S. Small Business Administration. The SBA updated its rules for loans approved on or after October 1, 2026 (SOP 50 10 8.1). Changes that affect sellers include:

• An independent valuation on nearly every sale. The lender orders it for any business price above $350,000, and for smaller sales between related parties. It will not lend more than the valuation supports. Lesson 1.3 covers this.
• A quality of earnings report on purchases of $3 million or more, ordered by the lender. Lesson 5.4 covers this.
• Tighter rules on seller notes. A note you carry counts toward the buyer's required cash only if you take no payments for the life of the loan, and only up to half of the required amount. Lesson 8.4 covers this.
• No earnouts. Payments tied to future results are not allowed in these sales. Lesson 8.5 covers this.
• Up to 24 months for a seller to stay on as a consultant. Lesson 10.3 covers this.

These rules apply only to buyers using SBA loans. Buyers paying cash or using conventional loans follow their own lender's terms.

The wider market

The economy, conditions in your industry and the number of active buyers all move the market. Sales have been taking longer. Investment bankers in Pepperdine's 2026 survey reported a sharp rise in the time it takes to sell a business compared with a year earlier.

What you can control

You cannot time interest rates or the economy. You can:

• Keep the business growing and the books clean, so it sells well in any market.
• Be ready before you need to be, so you can move when conditions suit you.
• Understand how your buyers will be financed, and price with that in mind.

Lesson 4.9 covers the timing that matters most: your own.