{
  "title": "When to Accept an Earn-Out as a Seller (and When to Say No)",
  "url": "https://acquisitions.com/blog/when-to-accept-an-earn-out/",
  "author": "Moran Pober",
  "publisher": "Acquisitions.com",
  "published": "2026-10-22",
  "updated": "2026-10-22",
  "section": "Selling a business",
  "keyword": "when to accept an earn-out",
  "short_answer": "Accept an earn-out when it closes a real price gap, the target is revenue you can still influence, the period is one to two years, and you keep a say in how the business is run. Refuse one when you will have no control after closing, the metric is profit the buyer can shape, or the buyer plans to restructure. SBA-financed buyers cannot offer one at all.",
  "facts": {
    "Share of price": [
      "Cash at close is 80% or more",
      "Earn-out is more than 25% of the total"
    ],
    "Metric": [
      "Revenue or gross profit, defined line by line",
      "EBITDA or net profit with no cost rules"
    ],
    "Period": [
      "12 to 24 months",
      "Three years or longer"
    ],
    "Your role": [
      "You stay with real authority over sales and staff",
      "You leave at closing with no say"
    ],
    "Buyer type": [
      "Owner-operator or strategic buyer keeping the business as is",
      "Roll-up or platform that will merge it"
    ],
    "Financing": [
      "Cash or conventional debt",
      "SBA 7(a) loan (earn-outs prohibited)"
    ],
    "Floor and cap": [
      "A floor that pays something at 80% of target, a cap you can live with",
      "All-or-nothing at 100% of target"
    ],
    "Protection": [
      "Acceleration on a sale, breach or your dismissal without cause",
      "Buyer can sell, fire you or change the plan with no payout"
    ]
  },
  "sources": [
    "https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs",
    "https://learn.srsacquiom.com/rs/664-KLJ-520/images/2026-ma-earnout-and-milestone-trends.pdf?version=1",
    "https://www.srsacquiom.com/our-insights/ma-earnout-milestone-trends/",
    "https://www.deallawyers.com/blog/?p=21960"
  ],
  "license": "Facts may be quoted with attribution to Acquisitions.com and a link to the url above."
}