Lenders lending at 4x leverage for 2m ebitda business (90% recurring)

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February 17, 2023

by a searcher from Harvard University - Harvard Business School in New York, NY, USA

Was wondering if anybody had recommendations for banks / bdcs / credit funds willing to provide 4.0x leverage for a business we are looking at. Purchase price is 6x, with 90% recurring revenue and only 10% annual revenue churn. High free cash flow conversion due to asset-light model.

Have gotten a few initial indications at that mark but wanted to make sure we were covering all bases.

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Reply by a lender
in United States
Over the years of my career I have worked for the big banks, the regionals banks, community banks and nonbank lenders. If you'd like to share more information regarding the project, email me at redacted --- I source best loan structure for change of business ownership loan projects expediting turn times by finding the right lender to match the request. All the best. -Deb
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Reply by a searcher
from Williams College in Cambridge, MA, USA
If you can find this type of deal, there are plenty of people who would love to hear about it. 3x is more likely in today’s environment (and even that can be a stretch). SaS business model might get that type of leverage. Traditional bank plus mezzanine might be an option but they’ll definitely want a healthy slug of equity.
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