When buying a business, the add-backs used to calculate adjusted EBITDA can make or break your financing. In this video, Brad Hettich, Founder & President of Commercial Lending X, explains what an add-back is, why adjusted EBITDA matters, and which add-backs SBA lenders will—and will not—typically accept. Drawing on feedback from 30 high-volume SBA lenders, Brad walks through how lenders evaluate add-backs and why buyers should not automatically rely on the adjusted EBITDA or SDE presented when a business is listed for sale. The key is understanding the business’s true cash flow before agreeing to a purchase price. An add-back that doesn't survive underwriting can reduce debt service coverage and potentially change the entire financing structure of the transaction. Brad also shares four steps buyers can take before signing an LOI to better evaluate add-backs, supporting documentation, personal income needs, and whether the proposed deal is likely to work from a lender’s perspective. If you’re considering buying a business and want to understand how lenders will evaluate the cash flow behind your deal, reach out to Commercial Lending X to discuss your financing options.