$5M EBITDA Business acquisition and $5-$10M real estate

March 27, 2025

by a searcher from Villanova University in Miami, FL, USA

All - I came across a larger deal and wanted to see if anyone has experience with structuring this type of transaction. The business is doing $5M of annual EBITDA and the seller wants to also sale the real estate which includes the building on the site and some land that can be redeveloped.

My question is can you do conventional loan on the business (5-6x multiple) then do 504 loan on the real estate? My understanding is conventional has shorter amortization compared to sba not sure about commercial amortization for real estate financing.

Sale leaseback could be option but depends on the market rent to be paid for the real estate post closing. Given the redevelopment piece does anyone have experience doing sale leaseback in this scenario?

Also, where are interest rates currently for real estate? Thanks for the insight.

Reply by a lender
from University of Southern California in Los Angeles, CA, USA

Sale leaseback and using an increased pro forma rent to get cash at close that will cover some of the purchase price for the business and then get SBA loan for the rest. I did something similar for a commercial laundry business in the north east. I can introduce you to a good sales leaseback broker. You can reach me here or directly at redacted You can also click here to schedule a meeting with me: https://cal.com/ishan-jetley-3d73m8/30min. Look forward to chatting!

Reply by a professional
from Villanova University in West Chester, PA, USA

^redacted‌ Yes, you can but the business has to occupy at least 51%, and there a few other nuances to 504 loans. We’ve done sale lease backs, but it’s dependent on finding the right party and negotiating the right terms. We have a podcast episode on real estate in deals https://deanstreetlaw.com/links Feel free to schedule a consultation call if you’d like to discuss the deal.

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