Why So Many Businesses Are Selling Their ERC Credits in 2025

When the Employee Retention Credit (ERC) was first introduced, it felt like a lifeline for businesses that kept people employed during uncertain times. Fast forward to 2025, and while many companies are still entitled to significant ERC refunds, there’s one major problem: waiting for the IRS.

That’s why more businesses than ever are choosing to sell their ERC credits instead of waiting months—or even years—for a refund. This shift isn’t about desperation. It’s about timing, cash flow, and smarter financial planning.

Let’s break down why this trend has picked up so much momentum in 2025.

The ERC Refund Backlog Is Still a Reality in 2025

If you’ve filed an ERC claim, you already know the frustration. IRS processing delays have been ongoing, and in many cases, businesses are still waiting well over a year to receive their refunds.

For a business owner, that kind of delay isn’t just inconvenient—it can be disruptive. Payroll, rent, inventory, insurance, and operating costs don’t pause while the IRS works through its backlog. Even profitable businesses can feel the strain when a large expected refund is stuck in limbo.

By 2025, many companies have simply decided they can’t afford to wait any longer.

What Does It Mean to Sell an ERC Credit?

Selling an ERC credit—often referred to as an ERC buyout—means converting a future tax refund into immediate cash.

Instead of waiting for the IRS to issue the refund, a third party purchases the credit and provides a lump-sum payment upfront. The business receives most of the value now, and the buyer assumes the wait for the IRS payment.

For many owners, this isn’t viewed as financing. It’s more like selling a receivable that already belongs to them—just faster.

Cash Flow Matters More Than Ever

One of the biggest reasons ERC buyouts are gaining popularity in 2025 is simple: cash flow is king.

Costs across nearly every industry remain elevated. Wages are higher. Supplies cost more. Borrowing money isn’t cheap. Even businesses that are doing “well” often prefer liquidity over waiting for a full refund sometime in the future.

Immediate capital allows businesses to:

• Cover payroll without stress
• Invest in marketing or growth
• Pay down higher-interest debt
• Build a cash buffer for uncertainty

For many owners, receiving 80–90% of a refund now is more valuable than waiting indefinitely for 100%.

ERC Buyouts vs Traditional Financing

Another reason businesses are selling ERC credits is that the alternative funding options aren’t always appealing.

Traditional loans come with:

• Lengthy approval processes
• Interest payments
• Monthly repayment obligations

Lines of credit may tighten during economic uncertainty. Merchant cash advances can be expensive and aggressive.

In contrast, an ERC buyout typically doesn’t require monthly payments, personal guarantees, or long-term debt. That makes it especially attractive to business owners who want liquidity without increasing liabilities on their balance sheet.

Reducing Uncertainty Around IRS Timelines

Uncertainty is exhausting for business owners. Not knowing whether a refund will arrive in six months or eighteen months makes planning difficult.

In 2025, many companies are choosing certainty over speculation. Selling an ERC credit turns an unknown timeline into a defined outcome. Once the transaction is complete, the business can move forward without constantly checking IRS status updates or worrying about delays.

That peace of mind is a big reason why CFOs and owners are warming up to the idea.

The Rise of Partial ERC Buyouts

Another trend gaining traction is partial ERC buyouts.

Instead of selling the entire credit, some businesses sell only a portion—enough to meet immediate needs—while keeping the rest for later. This hybrid approach gives owners flexibility and reduces the feeling that they’re giving up too much value.

It’s a practical solution for businesses that want liquidity now but still believe they can wait on part of the refund.

Which Businesses Are Selling ERC Credits Most Often?

While ERC buyouts can apply to many industries, they’re especially common among small and mid-sized businesses.

Industries frequently using ERC buyouts include:

• Hospitality and restaurants
• Manufacturing
• Healthcare practices
• Construction and trades
• Professional services

What these businesses tend to have in common is steady revenue, real operating expenses, and a strong need for predictable cash flow.

Clearing Up Common Misconceptions

There are still plenty of misconceptions around selling ERC credits.

One of the biggest is that it’s “only for struggling businesses.” In reality, many financially healthy companies choose buyouts as a strategic move.

Another misconception is that it’s the same as taking out a loan. While every agreement is different, many buyouts are structured as a sale of a credit—not debt.

Of course, businesses still need to be careful. Working with reputable providers and understanding the terms is critical.

What Businesses Consider Before Selling

Before moving forward with an ERC buyout, most business owners weigh several factors:

• How much of the credit they’ll receive upfront
• Whether to sell all or only part of the credit
• The quality and completeness of their ERC documentation
• Any potential tax or accounting implications

Many also consult their CPA or financial advisor to make sure the decision aligns with their broader strategy.

ERC Buyouts as a Strategic Tool in 2025

By 2025, selling ERC credits has evolved from a niche option into a mainstream cash-flow strategy. It’s no longer viewed as a last resort, but as one of several tools businesses can use to stay flexible and financially stable.

Rather than waiting passively for the IRS, owners are taking control of their capital and using it when it matters most.

Final Thoughts

The rise in ERC buyout isn’t about businesses giving up value—it’s about prioritizing timing, certainty, and control.

As long as IRS delays continue and economic pressures remain, it’s likely that more businesses will keep choosing immediate liquidity over delayed refunds. For many, selling an ERC credit in 2025 simply makes practical sense.

Related posts:

Estate Bonds Explained: Your Guide to Managing Estate Settlement Risks Differentiating Churn and Retention Rates: Critical Metrics for Business Success Finding the Right Conveyancer Near You: Navigate Property Transactions with Ease The Importance of Choosing the Right Takeaway Containers for Your Business