Input on whether this deal could work self-funded
January 31, 2025
by a searcher in New York, NY, USA
Looking at an accounting deal that I like, which is ~350k in EBITDA, and seller wants $3M (I can do $1.5M cash up front, ~$1M seller financing, with $500k forgivable seller note). I know this is an expensive valuation, but the seller won't budge.
The business itself is ~$900k in recurring revenue, 25% growth, ~25 customers, and has one customer representing 20% of revenue.
I'm wondering if this deal could theoretically get funded by SBA, or if anyone has more creative ways to get this deal done? I would envision this being the start of a roll-up play to acquire a few others and bring them together to build a bigger platform, but I'm trying to determine whether I can proceed on this one as a starting point at all given the small size and high valuation, which I know is a challenge for SBA.
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
As for how much debt the business will support, that really depends on what the true adjusted EBITDA is after factoring a salary in for you and what the terms are on the seller note. Technically if all $350,000 is really EBITDA, you should be able to get there on the debt side. However, if any of that needs to go to buyer salaries or are items lenders cannot verify, then the total debt you can get may need to be lower.
I think the bigger question I would have to be honest is why pay almost an 8.5x multiple for a business when in the EBITDA range you would be looking at 2 to 3.5 max. Even though it may be financeable, you are putting a lot of your own capital at risk. I would think you could find a much better deal elsewhere. Maybe there is something I do not know that makes this a great deal, but again it seems very risky.
I would be happy to jump on a call to talk through this in more detail. You can reach me here or directly at redacted Good luck.
from University of Southern California in Los Angeles, CA, USA