Most searchers select markets based on intuition, personal ties, or where other searchers have gone before them. That approach produces crowded markets and inflated multiples. A better approach starts with three publicly available datasets that, when layered together, reveal where the structural advantages actually are.
This resource combines three lenses: SBIC financing activity (where lenders are already comfortable backing acquisitions), PE firm concentration (where institutional competition is driving up multiples), and retirement-age business owner density (where the succession pipeline is deepest). The states that score well across all three are the ones where a committed buyer has the most room to operate.
The Three Lenses
Lens 1: SBIC Financing Activity
The SBA's Small Business Investment Company program is one of the most underused pieces of free market intelligence in this space. The SBA licenses private investment funds (SBICs) and provides leverage capital alongside private capital to fund small business acquisitions and growth. In FY 2024, the program deployed $7.26 billion into 1,014 businesses. As of FY 2025, there are roughly 367 licensed SBICs managing $53 billion in combined capital.
What matters for searchers is not the national number. It's the distribution. SBIC activity is concentrated in certain states, which means capital infrastructure for acquisitions is not evenly distributed across the country. States with strong SBIC activity have lenders who understand the deal type, legal and accounting professionals experienced in SBA-backed transactions, and a general ecosystem that makes closing easier.
The SBA publishes a state-by-state SBIC financing report (FY 2020-2024) as a downloadable Excel file. It breaks down the number of financings, number of businesses financed, and total dollar amounts per state per year.
SBA.gov
SBA.gov, FY25
SBA.gov
SBA "Underlicensed" Priority States
The SBA designates states where SBIC licensees per capita fall below the national median and the state has received below-median financing. These states get priority processing in the licensing queue and lower minimum capital requirements ($3M vs. $5M). For searchers, this list is a signal: these are markets where acquisition capital infrastructure is still developing, which means fewer institutional buyers are operating there.
Territories (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, U.S. Virgin Islands) are also on the list. The SBA updates this periodically at sba.gov/partners/sbics.
Lens 2: PE Firm Concentration by State
Private equity firm concentration is the clearest proxy for competitive intensity in a market. States with hundreds of PE firms have more buyers competing for the same deals, which drives up multiples and makes proprietary deal flow harder to build. States with fewer than 25 PE firms are structurally less competitive.
The distribution is remarkably uneven. New York and California alone account for roughly a third of all PE firms in the country. The entire middle of the country is comparatively wide open.
Source: TagniFi database of 4,929 active PE firms. Additional data from American Investment Council / Gain.pro 2024 reports.
Lens 3: Retirement-Age Business Owner Density
52.3% of all U.S. business owners are 55 or older. But that number varies dramatically by state. In West Virginia and New Mexico, it's over 60%. In Utah, it's 40%. The states with the highest concentration of aging owners have the deepest pipeline of businesses that will need to change hands in the next decade. Fewer than one-third of these owners have a formal succession plan.
National average: 52.3%. Source: U.S. Census Bureau ABS via LendingTree 2024 report.
The Sweet Spot: Where All Three Lenses Converge
When you layer these three datasets, the picture becomes clear. The markets with the strongest fundamentals for search fund acquisition are not the ones most searchers are targeting. They are mid-market states with high boomer ownership, low PE competition, and existing (or developing) SBIC infrastructure.
| State | Owners 55+ | PE Firms | SBIC Priority |
|---|---|---|---|
| West Virginia | 60.9% | 0 | Yes |
| New Mexico | 60.9% | 4 | Yes |
| Alabama | 54.6% | 9 | Yes |
| Oklahoma | 54.5% | 3 | Yes |
| Mississippi | 54.0% | 2 | Yes |
| Kentucky | 51.2% | 6 | Yes |
| Nevada | 49.3% | 6 | Yes |
| Montana | 49.6% | 2 | Yes |
| State | Owners 55+ | PE Firms |
|---|---|---|
| Ohio | 56.2% | 48 |
| Louisiana | 55.3% | 13 |
| Kansas | 55.3% | 17 |
| Michigan | 54.2% | 53 |
| South Carolina | 53.5% | 16 |
| Missouri | 53.4% | 42 |
| Tennessee | 53.4% | 46 |
| Indiana | 52.6% | 20 |
| Wisconsin | 52.1% | 22 |
| Nebraska | 50.4% | 7 |
| Arkansas | 49.7% | 6 |
Going Deeper: Metro-Level Breakdown
State-level data tells you where to look. Metro-level data tells you where to go. Within any given state, deal activity, PE competition, and business density are concentrated in specific cities. The difference between searching "Ohio" and searching "Cincinnati" is the difference between a thesis and a plan.
Below are the metros we consider most relevant for search fund buyers, organized by priority. Each entry includes the metro population, approximate small business count, SBA lending volume, and local PE presence.
These metros sit inside SBIC-underlicensed states with very few PE firms. The business base is large enough to produce deal flow, and institutional competition is nearly nonexistent.
| Metro | MSA Pop. | Small Biz | Local PE | State 55+ |
|---|---|---|---|---|
| Birmingham, AL | 1.18M | ~95K | 4-5 | 54.6% |
| Oklahoma City, OK | 1.44M | ~120K | 2-3 | 54.5% |
| Tulsa, OK | 1.03M | ~85K | 2-3 | 54.5% |
| Louisville, KY | 1.30M | ~110K | 3 | 51.2% |
| Jackson, MS | 580K | ~45K | 0-1 | 54.0% |
| Huntsville, AL | 520K | ~45K | 1 | 54.6% |
| Lexington, KY | 530K | ~50K | 2 | 51.2% |
| Albuquerque, NM | 920K | ~80K | 1-2 | 60.9% |
| Las Vegas, NV | 2.95M | ~250K | 3-4 | 49.3% |
| Charleston, WV | 255K | ~22K | 0 | 60.9% |
These are bigger metros with established SBA lending ecosystems and more deal flow, but also more PE firms operating locally. Still well below coastal saturation levels.
| Metro | MSA Pop. | Small Biz | SB Lending | Local PE | State 55+ |
|---|---|---|---|---|---|
| Columbus, OH | 2.20M | 220,943 | $438.7M | 8-10 | 56.2% |
| Cincinnati, OH | 2.26M | 201,790 | $498.7M | 8-10 | 56.2% |
| Cleveland, OH | 2.05M | 222,838 | $460.4M | 12-15 | 56.2% |
| Detroit, MI | 4.40M | 480,449 | $963.9M | 10-12 | 54.2% |
| Grand Rapids, MI | 1.10M | 111,194 | 3-4 | 54.2% | |
| Nashville, TN | 2.10M | ~200K | 13+ | 53.4% | |
| Indianapolis, IN | 2.10M | ~180K | 8-10 | 52.6% | |
| Kansas City, MO | 2.20M | ~200K | 6-8 | 53.4% | |
| Milwaukee, WI | 1.57M | ~130K | 8-10 | 52.1% | |
| St. Louis, MO | 2.80M | ~220K | 6-8 | 53.4% | |
| Memphis, TN | 1.34M | ~110K | 2-3 | 53.4% |
Smaller metros with specific advantages. Less overall deal flow, but a committed buyer can become the known presence in these markets quickly.
| Metro | MSA Pop. | Small Biz | Local PE | State 55+ |
|---|---|---|---|---|
| New Orleans, LA | 1.27M | ~110K | 2-3 | 55.3% |
| Greenville, SC | 950K | ~80K | 2-3 | 53.5% |
| Charleston, SC | 850K | ~75K | 4-5 | 53.5% |
| Chattanooga, TN | 570K | ~50K | 1 | 53.4% |
| Knoxville, TN | 900K | ~75K | 1-2 | 53.4% |
| Omaha, NE | 1.00M | ~85K | 1-2 | 50.4% |
| Baton Rouge, LA | 870K | ~70K | 1-2 | 55.3% |
| Little Rock, AR | 750K | ~60K | 1-2 | 49.7% |
| Wichita, KS | 661K | ~55K | 1-2 | 55.3% |
| Dayton, OH | 810K | 68,049 | 1-2 | 56.2% |
| Mobile, AL | 420K | ~35K | 0-1 | 54.6% |
| Fort Wayne, IN | 440K | ~35K | 0-1 | 52.6% |
Metro-level SBA lending and business count data sourced from SBA Office of Advocacy Metro Profiles (2025). PE firm counts from Mergr. Population from Census Bureau 2024 MSA estimates. "Local PE" reflects firms headquartered in the metro, not firms that may invest there remotely.
How to Use This Data
This is not a ranking of where you should search. Geography is personal, and every market has nuance that data alone cannot capture. What this data does is give you a starting framework for market selection that is grounded in structural fundamentals rather than anecdote.
If you're early in your search, use these three lenses to narrow your list before you commit time and travel. If you're already in a market, use them to validate (or challenge) your assumptions about competition and deal supply. If you're running a national search, use them to sequence which regions deserve concentrated effort first.
The SBA's SBIC financing data is updated annually and available as a free download. The PE concentration data shifts slowly. Owner demographics are structural and will only intensify through 2030. Together, they form a picture of where the opportunity is, and where the crowd is not.
Sources
SBA SBIC Financing by State Report (FY 2020-2024) · SBA: SBIC Program Delivers Record Capital in FY25 · SBA: SBIC Underlicensed States · TagniFi: Active PE Firms by State · Gain.pro: Top 250 US PE Investors 2025 · American Investment Council: PE Economic Impact 2024 · LendingTree / Census Bureau: Boomer Entrepreneurs 2024 · U.S. Census Bureau Annual Business Survey · Gallup: Small Business Owners Lack Succession Plans · Project Equity: Silver Tsunami · SBA Office of Advocacy: Metro Profiles 2025 · Mergr: PE Firm Database · Census Bureau: MSA Population Estimates 2024 · BizBuySell: Insight Report Data Tables
