Customer Concentration Workaround?

intermediary profile

July 08, 2025

by an intermediary from University of Colorado at Boulder in Charlotte, NC, USA

I have a client with significant customer concentration in###-###-#### % to one customer over dozens of jobs). While 2025 is better, that customer will still be their #1 client. SBA lenders won't touch the deal, but the seller is willing to finance the vast majority of the deal either through a note or rollover equity. He was at $3.2M EBITDA in 2024 and is trending higher than that in###-###-#### He was consistently between $1.6M and $2.0M in EBITDA prior to###-###-#### What are your thoughts on a deal structure that will work? Or is the customer concentration a deal killer?
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commentor profile
Reply by a lender
from University of Missouri in Denver, CO, USA
I have done some deals with high customer concentration. It would take a large (likely forgivable) seller note, but it may be possible to go SBA still. How sticky is that client? Is there a contract? Would the seller be willing to provide a partial guarantee?
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
I concur with Sean above. We have done some deals with very large customers concentrations like this. I would be happy to take a look and see how we might be able to assist. You can reach me here or directly at redacted
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