At some point, you find a deal that looks like it could be the one.

Good industry.
Clean-looking CIM.
Decent SDE.
Reasonable story.
Broker says financing should not be an issue.
That is where it gets dangerous.
Not because the deal is automatically bad.
Because now you want it to be good.
And once you want it to be good, your brain starts working against you.
You stop asking:
“Does this actually make sense?”
And you start asking:
“How can I make this make sense?”
That is a very different question.
I saw this over and over while putting 80 businesses through ADE.
The listing would show strong SDE.
Then you look closer and realize a big chunk of the number depends on add-backs.
Some are probably legitimate.
Some are soft.
Some need proof.
Some may not survive lender or CPA review.
That matters because the SDE number does not just affect valuation.
It affects debt support.
It affects buyer confidence.
It affects whether the business can pay the loan, cover working capital, pay the buyer or operator, and still survive when something goes wrong.
Then you get to the SBA side.
A seller can ask whatever they want.
A broker can say the deal is financeable.
But if the cash flow cannot support the debt, the lender is going to bring everybody back to reality.
That is one of the biggest reasons ADE shows an estimated SBA financing ceiling.
Not as a target price.
As a reality check.
Because “financeable” does not mean “worth the asking price.”
And “good SDE” does not mean “safe to trust.”
I wrote more on both of those problems here:
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Lesson from the middle of the search:
The buyer is not just screening the business.
The buyer is screening their own discipline.