Alternative lenders (high discretionary deals)?

searcher profile

March 27, 2025

by a searcher in Mississauga, ON, Canada

We have a few deals that keep coming across desk offering great terms###-###-#### % seller notes on 2 year standby, 10 year amort, 0% interest + low multiples + 12 month transitions included + 3 months working capital included and so on) where the main issue that's stopping them from being SBA bankable is their discretionary spend that gets normalized is too much of the net income.

Typically it's all provable - they can produce receipts and it's easily justifyable (ie. rent paid to self for a 100% remote company or personal health insurance). Just that it's a high ratio, typically 70-80% of net is made up of this spend.

Curious if there's any good alternative options out there given these deals can easily take on 15-20% debt rates but just need to be bought, run clean and by the first tax return look night and day different.

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commentor profile
Reply by a lender
from University of Southern California in Los Angeles, CA, USA
Most SBA lenders will accept legitimate addbacks. You only need to hit 1.25 on the DSCR with the acceptable addbacks. A higher rent or costs specifically run for the business owner’s personal benefit are legitimate addbacks.

I’d love to help you find the right SBA lender for this deal. We work with all the major SBA lenders. The bank pay us after your loan closes, so this is a 100% free service for you. 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!
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Always happy to take a look at the transactions and let you know how much debt we can get done. You can reach me here or directly at redacted
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