Funding a bit larger deals

by a searcher from University of Oregon - Charles H. Lundquist College of Business

1 month ago

Hi! The content here is awesome and I thought I would throw this out to the collective knowledge of the community.  I hear lots of searchers talking about businesses with EBITDA in the $1-2MM range.  While I think this gets you a certain kind of established and weathered business, I'm curious how funding is working in these ranges since some of the profit numbers would imply valuations >$5MM that the SBA would fund and require cash injections that are substantial.  I'm looking to hear from anyone that might have done this and how you structured the deal?  Thanks in advance for the help.

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lender

^Searchfunder member‌ it depends on the deal and the multiple. Larger multiples might go through SBIC, while lower multiples can typically be done with SBA. If you'd like to explore your options or discuss the details, feel free to reach out to me at --@----.com

2 weeks ago | like reply | 0 likes

searcher from Columbia University - Columbia Business School

^Searchfunder member‌, I would argue that larger deals are easier to fund, unless they are between $1M and $2M in EBITDA. PariPasu (to 7.5M in debt), extra equity, SBIC funds will all help in this area. Past 2M in EBITDA you can definitely find PE firms that do this or SBIC funds. Past 3M in EBITDA, you will have many suitors. Capital is a commodity, deals valued at low multiples are the true currency.

2 weeks ago | like reply | 0 likes

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