America's small businesses drive innovation, employment, and community vitality—but when it's time to transfer ownership, they face outdated financing methods that leave sellers and buyers frustrated and financially exposed. The current reliance on Small Business Administration (SBA) guarantees creates excessive bureaucracy, rigid banking rules, and unnecessary uncertainty. These obstacles stifle entrepreneurship and weaken the economic contributions of small businesses.

This white paper proposes a powerful solution: the Seller-Financed Business Sale Tax Credit Program, an innovative tax reform designed to shift control from restrictive banks and government agencies directly back to business owners. Unlike traditional SBA-backed lending, this program uses targeted tax incentives to empower sellers to finance their own sales, reducing dependency on banks and complex regulations.

The proposed program directly addresses seller risk through robust, refundable tax credits that protect against buyer defaults, while significantly lowering sellers' upfront tax obligations via preferential capital gains treatment. Buyers benefit through increased access to capital and streamlined negotiations directly with sellers—without navigating complicated bank underwriting or restrictive SBA requirements.

By replacing cumbersome government-driven lending with simple, market-based incentives, this policy creates a more efficient and dynamic marketplace for small business transitions. Ultimately, it secures small business legacies, fuels entrepreneurial growth, and reduces taxpayer exposure, thereby revitalizing America's small business economy from the ground up.

Read the full Breaking the Bank: How Innovative Tax Credits Can End SBA Dependency and Ignite the Small Business Economy, available HERE.