Thoughts on a small acquisition…

December 29, 2025

by a searcher from Emory University in Saugerties, NY, USA

I am looking for some pros and cons of a smaller acquisition. I know the old adage, working in the business not on the business, but more so where do you all see fragility and/or strength. Commercial Landscaping, 200K SDE, 2X Multiple, SBA pre-approved, 15 years in Business. Looking at possibly purchasing with a 2nd identical company. Help me play devils advocate!

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

Sometimes it can be hard to finance smaller businesses like that. Even if the broker says they are SBA pre-approved, you do not always know how much of the deal the SBA lender has reviewed and whether it is really something they can finance. We often find once you adjust for a buyer's salary, working capital, and future CAPEX needs, the actual adjusted EBITDA is lower, which can make it much harder to finance the transaction. Also, most SBA 7A lenders for a business acquisition want a minimum loan of $350,000 or higher. We have had some success with clients buying two or three business in the same industry at the same time and getting lenders more comfortable with that, but that does come with added integration risk. Also it is rare two businesses, even in the same industry, run exactly the same. Usually pricing, customer mixes, products & services, etc. are slightly different. So merging them is not always a smooth process. We do offer a free review, so we would be happy to look at the deal you are working on and provide more specific feedback on what you might hear from lenders as well as let you know anything we see that might be a concern with the business. You can reach me here or directly at redacted Good luck with your search.

Reply by a searcher
from Northwestern University in Brooklyn, NY, USA

I haven’t done it and I’m still early in my search, but when I consider this my reasons for rolling it out were: 1. The SDE is much more variable at that point and I’d be worried about the consistency year over year. 2. Unless businesses are physically are near each other. and immediately operable as one you’ll be taking on two full-time jobs working of working in the business rather than on it, not just one of those. 3. If your plan is to hire a GM once you have multiple of them will be looking for a very talented individual who likely would want a larger salary of managing dispersed businesses.

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