5 Reasons Asset Deals are Popular in Small & Mid-Market M&A

When it comes to small and mid-sized business acquisitions, asset deals dominate over share deals. Here’s why they’re a favorite for buyers:

• Lower Risk Exposure – Buyers only pick specific assets they need, leaving behind any past legal or financial troubles.
• Better Tax Treatment – New owners can claim higher depreciation and amortization deductions, improving post-deal cash flow.
• Flexibility in Pricing – The buyer and seller can allocate value to each asset, optimizing the deal for both sides.
• Easier Financing – Banks and lenders often prefer asset-based financing, making it simpler to secure loans.
• Clearer Due Diligence – Buyers know exactly what they’re getting—no hidden surprises with off-balance-sheet liabilities.

While asset deals require transferring individual contracts, licenses, and employee agreements, the benefits of reduced risk and better tax outcomes often outweigh the extra paperwork.

For entrepreneurs buying a business, an asset deal is usually the safer bet!