Going to be very difficult to generate a 25%+ IRR when paying 8-10x EBITDA unless you have clear path to triple EBITDA. Otherwise you’ll see massive multiple compression when you go to exit which will wipe your equity position out.

Max leverage you’ll get is $3.5-$4mm in SBA debt so you will need to raise $3.5m-$4mm in equity. That’s not easy if you don’t have a rock solid track record or industry background.

I would also be cautious to pay that much for a small distributor unless they had some kind of contract / exclusivity with their supplier or they have some kind of value added service that makes them unique. Could put the biz in a precarious situation at the ownership transition.

To the point. Additionally, 20% net for such a small distribution business is hard to pull off unless it is a super niche vertical suggesting limited growth rate.