Current LBO loan market (non-recourse, not SBA loan)

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May 19, 2022

by a searcher from INSEAD in アメリカ合衆国 カリフォルニア州 フリーモント

Hi everyone,

Does anyone have experience with getting a LBO loan (non-recourse, not SBA loan) for their small buyout recently, especially after the rise in the interest rate?

I am currently pursuing a $3M acquisition of a business service company (i.e. no hard asset) with appx. $1.2M SDE. I am hoping to get a 1x leverage on the transaction. I want to understand the criteria for getting an LBO loan approved and the typical terms.

Thanks, Shun

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Reply by a searcher
from University of Notre Dame in Dublin, OH, USA
$1-2M in EBITDA is sort of a dead zone for conventional financing.

Unfortunately, there aren't many conventional options for what you're describing. If you're set on non-SBA and non-PG, you'll likely have to source this from a private lender (like a high net worth individual or a family office).
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