The lease can break the deal faster than bad numbers

lender profile

May 23, 2025

by a lender in Falmouth, MA, USA

Do yourself a favor. Loop in the landlord early. Especially when the business depends on its location. Deals fall apart when landlords refuse to extend the lease or use the sale as a chance to raise the rent. That increase squeezes EBITDA, lowers enterprise value, and can kill the deal. A great business with a bad lease is no longer a great business. Do not wait until diligence. Call the landlord early.
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commentor profile
Reply by a searcher
from Arizona State University in Scottsdale, AZ, USA
We have seen too many deals stall because LL are not corporative or non-responsive. Reading the existing lease terms before you write a PSA is important. In my opinion dealing with LL is a function of both the buyers and the seller and working together to move it forward.
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Reply by a lender
from University of Missouri in Denver, CO, USA
Great point, Goran. Additionally, for SBA deals, unless the location is not vital to the business success, the SBA will want the lease to be 10 years. This is also something I bring up in early conversations.
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