Read the full breakdown and see why 2025 may be the smartest year yet to make a move.
The Big Beautiful Bill Act, recently signed into law, introduces sweeping tax reforms that could reshape the landscape for small business ownership and private business transactions. While much of the national conversation has focused on its broader economic or political implications, those working in the world of business sales, acquisitions, and valuations will find the bill especially consequential.
This legislation strengthens several pro-business provisions that had previously been temporary or phased out under earlier tax laws. In doing so, it creates new certainty and opportunity for business owners looking to sell, entrepreneurs seeking to buy, and advisors working on both sides of the transaction.
Below, we examine the most impactful changes and why now may be an especially advantageous time to buy or sell a small business.
The most notable and widely beneficial change in the bill is the permanent extension of the 20% Qualified Business Income (QBI) deduction for owners of pass-through entities. These include sole proprietorships, LLCs, S corporations, and partnerships-the dominant structures for most privately held businesses in the United States.
For many small business owners, the QBI deduction has provided a meaningful reduction in personal tax liability. However, until now, it was scheduled to sunset after 2025. The new law removes that expiration and broadens access, allowing owners to plan around a predictable and favorable tax regime.
For buyers, this makes pass-through ownership structures even more attractive, as they offer ongoing tax efficiency. For sellers, the ability to demonstrate strong after-tax earnings boosts EBITDA multiples and supports higher valuations, particularly in sectors where earnings flow directly to ownership.
Another major component of the bill is the restoration and permanent implementation of 100% bonus depreciation for qualified assets. Effective for new and used assets acquired after January 19, 2025, this provision allows businesses to immediately expense the full cost of capital assets such as machinery, vehicles, computers, and other equipment.
In the context of a business acquisition, this change is powerful. Buyers of asset-heavy businesses (e.g., construction, manufacturing, logistics, and automotive services) can structure deals to maximize upfront deductions, improving cash flow and after-tax returns in the early years of ownership.
Sellers also benefit, as the buyer’s ability to write off assets can make the business more appealing, particularly when the business includes substantial equipment or vehicle value.
Section 179, another cornerstone of small business tax planning, allows for the immediate deduction of certain qualified property instead of requiring depreciation over time. The Big Beautiful Bill Act increases the 2025 expensing limit to $2.5 million, with the phaseout threshold rising to $4 million. These figures will also now adjust annually for inflation.
For business buyers, this creates another strategic tool to manage taxable income following a purchase. While bonus depreciation covers many large asset categories, Section 179 is often easier to apply for software, office furnishings, and lower-cost equipment.
In asset sales-especially in transactions involving SBA financing-the increased limits can also impact how the purchase price is allocated, influencing both tax strategy and deal structure.
For years, small and mid-sized businesses engaged in product development or process innovation had to capitalize and amortize their research and experimentation (R&E) expenses over five years-a change that created cash flow challenges, especially for early-stage firms.
The new bill reverses that requirement and permits immediate expensing of domestic R&D costs, retroactive to 2022 for eligible small businesses.
This change is especially meaningful for businesses in software development, health tech, manufacturing design, and engineering services. Sellers in these sectors can now show cleaner financials with higher EBITDA, while buyers enjoy stronger incentives to continue investing in innovation post-acquisition.
Combined, these provisions represent a strong tailwind for business brokerage and M&A activity. Buyers now have clearer, long-term tax benefits to support more aggressive acquisitions. And sellers-particularly those who have delayed exit planning due to uncertainty around tax policy-have fresh motivation to come to market.
Valuations are likely to remain firm, especially for profitable companies with significant capital assets, recurring revenue, or growth potential. Business brokers and advisors should expect to see increased deal flow, especially in the Main Street and lower middle market sectors, where many businesses operate as pass-throughs and rely heavily on capital investment.
While the Big Beautiful Bill Act is largely a victory for small business owners, it’s important to acknowledge growing concern about the long-term fiscal implications of the legislation. Making temporary tax cuts permanent-particularly those affecting depreciation and income deductions-may contribute to a significant increase in the federal deficit over time.
Critics have also raised alarms about potential downstream effects on healthcare funding, public investment, and social safety net programs, which could be squeezed as federal revenues decline. While business owners may benefit now, real people and communities may face consequences in the form of reduced services or increased economic inequality if budgetary pressures intensify.
For buyers and sellers alike, these broader economic considerations shouldn’t be ignored. Stability and prosperity in the small business sector rely not only on favorable tax treatment but also on healthy consumer demand, workforce support, and community infrastructure-all of which are tied to national economic policy.
The Big Beautiful Bill Act offers one of the most business-friendly tax environments in recent memory. For sellers, this is an opportunity to maximize valuation and attract well-capitalized buyers. For buyers, the new rules provide tools to optimize post-closing cash flow and investment strategy.
For brokers and advisors in the M&A space, this is a moment to re-engage clients who were hesitant in previous years. With tax certainty, generous depreciation, and enhanced expensing, both sides of the table have more to gain and more reason to act.
If you’ve been thinking about a sale, an acquisition, or preparing a client for exit, there may be no better time than now.
For business owners exploring a potential sale, the team at Murphy Business Sales of Hudson, Ohio is ready to help. Led by Bill White, our experienced advisors offer confidential consultations, professional valuations, and strategic guidance tailored to your goals. Visit us at MurphyBusiness.com/Hudson to learn how we can support your successful exit.
