How to Structure Licensed Contractor SBA Deals in 2025 (And Why It Matters in Las Vegas)
By Michael Cash, Business Broker, Based in Las Vegas, NV
As a business broker here in Las Vegas, I’m currently representing two licensed contracting businesses for sale. These aren't just any companies — they operate in regulated trades like electrical and wood trim and built-in manufacturing, and both require a Nevada contractor’s license to legally function. No valid license? No SBA loan. It’s that simple.
Everyone involved — the SBA lenders, the buyers, and certainly the sellers — understands that without the proper licensing in place, there's no business to transition. SBA financing won’t move forward unless this critical detail is sorted before closing. Not after. That flexibility we sometimes saw in the past is gone. Today, SBA underwriters are demanding clarity and compliance on day one.
If you’re planning to buy or sell a licensed contracting business in 2025, here's how we're structuring successful SBA transactions right now in Nevada:
Four Licensing Models That Still Work:
1. Buyer Already Holds the Required License
This is the gold standard.
- Minimal lender friction
- Fast-track approval process
- Little to no additional paperwork
If the buyer is already licensed in Nevada, lenders are typically very comfortable, and the deal moves efficiently through underwriting.
2. Licensed Key Employee Stays with the Business
If the buyer isn’t licensed, we look to key staff.
- Employee signs a minimum two-year employment contract
- Buyer grants a small equity stake (usually 1%–5%)
- This fosters loyalty and satisfies lender concerns
This approach is currently the second-most preferred structure by SBA lenders. It helps ensure business continuity and reduces operational risk.
3. Symbolic Equity Model for License Holder
For cases where full ownership transfer isn’t ideal:
- The licensed individual receives minor equity
- Often paired with a performance bonus or retention incentive
- Stays below the 20% SBA personal guarantee threshold
Lenders like this setup because it retains licensed talent without overcomplicating ownership structure or requiring personal guarantees from the license holder.
4. Seller Retains License and a Personal Guarantee
This only works if the seller agrees to stay involved long-term.
- Typically reserved for family sales or highly amicable deals
- Seller must sign a full personal guarantee (PG)
This method is rare, but still viable under the right circumstances.
What the SBA Is Now Requiring
SBA guidelines have changed:
“The business must be fully licensed, legal, and operational on the day of closing — not at some point in the near future, and not after a “qualified employee” licensing exam.” (SOP 50 10 8)
Lenders are insisting on full operational readiness at the time of closing.
At Benchmark We Provide the Following Before Underwriting Even Begins
To avoid delays, we prepare and present:
- A signed employment agreement with the license holder
- Proof of active licenses and regulatory compliance
- A clear contingency plan if the license holder leaves
- “Symbolic equity” or incentive documents (if applicable)
- A seller Personal Guarantee if they're staying involved
Bottom Line for Las Vegas Buyers & Sellers
In 2025, SBA-funded deals won’t fall apart over pricing — they will fall apart over business continuity. If full, compliant license coverage isn’t in place on day one, the financing won’t close. No exceptions.
If you're buying or selling a licensed contracting business in Nevada — whether it’s HVAC, roofing, electrical, or plumbing — you will need a license continuity plan before any offers are signed. Without license continuity the deal won’t survive SBA lender underwriting.
If you're not sure how to structure your business exit, give me a call. Helping buyers and sellers close properly structured SBA transactions is our specialty.