Currently working through an LOI offering using SBA debt. I'm looking to protect downside risk of customer concentration using a forgivable sellers note. The intention is to tie the note forgiveness to revenue generated by the top customer. The forgiveness percentage would be based on a sliding scale of the historical revenue target. For example if 50% of the historical revenue target is achieved then 50% of the note would be forgiven,

What suggestions would you have in determining the amount of the sellers note. I have considered options from modeled EBITDA reduction only, to purchase price adjustment (EBITDA reduction x multiple), to modeling only what would preserve debt service coverage ratios. I'm mindful that this can reduce sellers cash at close and present seller risk that may not create for a win win deal.

How long is typical for a forgiveness period?

Let me know what you all have found successful.