valuing asset heavy manufacturing businesses

A word of caution: keep in mind that EBIDTA can dramatically state real income (NOI), in industries where assets depreciate as part of the normal course of business. I would seek to understand very well what the forward looking depreciation on assets will be, and at least factor that into your DSCR and resulting valuation. If you have to inject cash into the business to, e.g., buy new machinery, where will the money come from? With respect to the valuation itself, others are on the money here: factor them separately.

Breakdown and value each component separately. This way you get a more accurate representation of what you are buying plus the math is easier to figure out. Having strong assets gives you a ton of flexibility for financing and financial engineering. Leases, age of equipment, depreciation, gives you a sense of what you have to work with. My two cents on SBA…. A major headache coming in from the outside versus once you own the company. It’s been easier to secure and apply once the company is yours. Again, not to say you couldn’t do it. It is just a heavier lift using it as an acquisition tool.