Sellers looking to cash out after 1 great year....

March 04, 2026

by a searcher from Hofstra University - Frank G. Zarb School of Business in Miami, FL, USA

I have been searching for a few months now and recently...I think start of 2026, I have seen several CIM's with 2025 financials being great and in the range I am looking for. Once the CIM hits the previous years SDE are nearly 40-50% lower than 2025 and the sellers want their premium to exit. I mostly walk away from these deals as 1 great year does not call for a higher selling price because they spoke to a broker. I wanted to see if I am looking at this correctly or this is normal in this space? I guess if I was to pull the trigger on a deal like this, I would need to allow for higher reserves. Also how does SBA and banks look at this? Do they take an average for DSCR or just use the 2025 numbers? Thoughts?

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

Hi ^redacted‌ - in my experience with the SBA, they look at all three years (2023, 2024, and###-###-#### individually - not as an average. Each year needs to cash flow on its own, verified from tax returns with reasonable add-backs applied. That said, the most aggressive lenders in our network will underwrite on just 1 year of tax returns + a current P&L, as long as both are cash flowing. So even if earlier years were weak, it doesn't automatically kill the deal. The right lender match matters as much as the numbers themselves. And on tough deals, if the seller can file their 2025 tax return early, some lenders will allow a current 2026 P&L to be used, shifting the window to 2024, 2025, and###-###-#### That alone can turn a decline into an approval. We have a lot of experience financing various companies via the SBA. If you ever need help reviewing a deal, I'm happy to help. We work with all the major SBA lenders and the bank pays 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: https://cal.com/francodeguzman/30min. Look forward to chatting!

Reply by a searcher
from The University of Chicago in Chicago, IL, USA

You are probably right. Saw a lot of theses in search, mostly an issue. You’ll see a lot that are stable, the. Still plummet mid-year of the acquisition.

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