The Hidden Cost of Renting: Younger Buyers Locked Out of Business Ownership

Written by:

Steve Marcinuk

Date:

01 Jun 2026

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A quiet but consequential pattern is playing out across the Mid-Atlantic small business market. Business brokers working the region are encountering a growing segment of prospective buyers – many of them younger, motivated, and in some cases pushed toward entrepreneurship by AI-driven job uncertainty – who lack one of the most fundamental financial assets lenders and sellers look for: real estate ownership.

Kristi May, Owner and Lead Business Consultant at J&E Business Group, operates at the intersection of residential real estate and business brokerage. Licensed under eXp Realty for residential transactions and running her own business brokerage practice separately, May has watched this pattern develop with increasing frequency.

Without real estate equity, these buyers cannot secure bank loans, SBA loans, or even many seller-held notes. “A lot of the people coming to me do not own real estate, and they’re not understanding why that’s important,” she explains.

The Leverage Gap

The practical consequences of this gap surface quickly when buyers approach sellers. Without equity to back a loan or secure a seller-held note, deals stall. May describes situations where buyers request seller financing, only to find that even private sellers want some form of secured collateral.

When the answer is no, buyers are forced into increasingly creative arrangements – seeking partners willing to contribute a home equity line of credit, for instance, just to get a transaction across the line. “The seller is saying, ‘Do you have real estate? Do you have an asset that I can secure even my seller note to? May says.

This dynamic is unfolding against a broader cultural backdrop. Homeownership rates among younger Americans have been declining for years, driven by affordability pressures, shifting lifestyle preferences, and in some markets, a genuine belief that renting is the smarter financial choice. May is not dismissive of those arguments, but she sees a blind spot in how younger buyers weigh their options.

Real estate equity, she argues, functions as more than a housing asset – it serves as leverage for wealth-building across multiple domains, including business acquisition. “I fear that the younger generation, when they’re saying, ‘It’s not realistic for me to own,’ or ‘I don’t want to put my money there’ – it’s a little bit short-sighted in how it can be leveraged for their wealth building,” she says.

What’s Actually Moving in the Mid-Atlantic

While financing gaps slow some transactions, certain sectors are seeing strong deal activity. J&E Business Group handles transactions ranging from roughly $100,000 to $6 million, with a concentration in trade-based businesses. Automotive businesses are currently generating significant activity, driven by what May describes as a generational handoff – older owners looking to retire, meeting younger buyers who see skilled trades as stable and appealing. HVAC companies and landscaping businesses are also moving relatively quickly.

The firm is expanding into service-based businesses as well, including tax preparation practices, where buyers are often existing business owners looking to acquire a book of clients rather than build one from scratch.

Seller involvement post-sale is another factor making certain deals more attractive to both lenders and buyers. When an outgoing owner stays on during a transition period, it reduces perceived risk and can strengthen a loan application. About a quarter of J&E’s deals involve real estate in some form, whether a property is bundled with the business or a lease situation needs careful structuring. Having licensed commercial agents on the team allows the firm to handle both components or separate them when that serves the parties better.

The Silver Tsunami, With Caveats

The widely discussed “silver tsunami” – the anticipated wave of baby boomer business owners looking to exit – is real in May’s market, but more nuanced than the headline suggests. Buyer demand is strong, in some cases outpacing the supply of quality listings. But not every business a retiring owner wants to sell will find a willing buyer.

Some legacy businesses have been overtaken by e-commerce or changing consumer habits. “There are a lot of industries from the older generation that I don’t know will make it,” May says. “Certain things that maybe Amazon has replaced – that is very hard for a seller to understand.”

The businesses that do sell are those with clear financials, documented operations, and a value proposition that holds up in today’s market. One of May’s more consistent observations about sellers is how many arrive underprepared – not in terms of motivation, but in terms of documentation. Standard operating procedures, clean books, and organized financial records are not formal requirements, but their absence can create friction that slows or derails a sale. “The more prepared you are to exit, it’s going to come across to a buyer, and it’s going to communicate a strong sense of trust,” she says.

Financing Conditions Are Tightening

Beyond the real estate collateral issue, the lending environment itself is becoming more demanding. SBA loans remain a primary financing vehicle for business acquisitions. Still, lenders are scrutinizing both sides of transactions more closely – verifying that a seller’s profit and loss statements align with tax returns, and vetting buyers for relevant industry experience.

Buyers without a background in the industry they’re trying to enter face particular difficulty. Some SBA lenders also decline to work with businesses valued under $500,000, which narrows options for smaller transactions and pushes more deals toward seller financing or creative structuring.

This tightening reinforces May’s broader point about real estate as a financial foundation. For buyers who own property and have built equity, a home equity line of credit can serve as a meaningful source of capital or collateral. For those who don’t, the path to acquiring a business is narrower and more dependent on finding flexible sellers or alternative arrangements.

Looking Ahead

The market May is navigating – characterized by motivated sellers, eager but sometimes undercapitalized buyers, and stricter lending standards – is one where preparation and financial literacy carry more weight than they did a decade ago. J&E Business Group is focused on expanding its listing volume and growing its team both regionally and nationally through the remainder of 2026.

For real estate professionals watching adjacent markets, the business brokerage space offers a useful signal: the assets people build or fail to build through property ownership have consequences that extend well beyond housing. As more young professionals consider entrepreneurship – whether by choice or because traditional employment feels less secure – the gap between those with real estate equity and those without may widen further, shaping not just who can buy a home, but who can buy a business.

About the Expert: Kristi May is Owner and Lead Business Consultant at J&E Business Group, a business brokerage practice serving the Mid-Atlantic region, handling transactions ranging from approximately $100,000 to $6 million. She is also licensed under eXp Realty for residential real estate transactions.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.