How do you actually evaluate a CIM before signing an LOI?

June 01, 2026

by a searcher from Carnegie Mellon University - Tepper School of Business in Pittsburgh, PA, USA

Honest question for anyone who has signed more than one LOI.When you received the CIM, what was your actual evaluation process before deciding to pursue it?Not what the process should be. What you actually did.Did you have a framework? Build a spreadsheet? Rely mostly on your attorney? Go on gut feel and validate later?I have spent the last year talking to buyers about this and the range of answers genuinely surprises me. Curious what this community's experience actually looks like.

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Reply by a lender
from Cornell University in Los Angeles, CA, USA

Hi ^redacted‌ - nice to meet you. Honest answer from the financing side. What I see from buyers who actually close deals: most overcomplicate this. The first three questions on any CIM are simple. 1. Does the deal cash flow? Take the SDE the broker is showing, subtract a realistic owner salary (usually $40K to $80K depending on what you need to live on), subtract rent if it is not already pulled out, then run the loan payment at current SBA rates. If the cash flow does not cover the loan with room to spare, the deal is dead before you do anything else. Most banks want 1.25x or better. 2. Do you have enough cash to close? SBA requires 10% equity injection on the total deal cost (purchase price plus closing costs plus working capital). At least half of that has to be your own cash. The other half can come from a seller note on full standby. For a $1M deal, that is roughly $50K to $100K of your own money on the table. 3. Do you have enough cash left after closing? Banks want to see post-close liquidity. After you write the equity check, you should still have a few months of operating reserves plus enough to cover your personal living expenses for 6 to 12 months. If closing the deal cleans you out, no lender will fund you. We know certain lenders that will even do a deal with a post-close liquidity of 2% of the total project cost. 4. Does the business require a license you do not have? Electrical contracting, plumbing, HVAC, CPA firms, medical and dental practices, and others need a specific license to operate. The SBA wants to see operational continuity after close. If you are not the licensed party, the two most common routes are keeping an existing licensed employee on staff after close, or hiring a new licensed employee before close. Either way the lender will want documentation that the license stays with the business. Happy to run this on any CIM you are looking at. We do free deal analysis for buyers all the time. We have a lot experience financing various companies via the SBA. If you ever need help reviewing a deal, I am happy to help. 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 email me directly at redacted or schedule a meeting with me: https://cal.com/francodeguzman/30min. Look forward to chatting!

Reply by a searcher
from Howard Payne University in Austin, TX, USA

Honestly, a CIM is a marketing document. You need to see some basic financials before signing an LOI. I always ask for 3 years P&L, 3 years balance sheet, 3 years revenue by customer (anonymized), and an employee roster (also anonymized) with tenure and salaries. Once I have those, I use a custom tool I purpose-built that gives me the go/no-go.

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