creative deal structuring ideas?

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July 16, 2021

by a searcher from University of Arizona in Phoenix, AZ, USA

Any creative deal structuring ideas?
Total acquisition cost: $1.4M to $1.7M
EBITDA: $700K
Qualifies for SBA Loan: $500K only
Target operating for under 2 years

Seller financing? But how?

Would love your insight!

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commentor profile
Reply by a searcher
from Tufts University in Jersey City, NJ, USA
I'd be concerned that the lender isn't letting you lever more than $500k on $700k of EBITDA. Talk to the bank and see if they're arriving at a significantly different EBITDA figure on their own calculations than you are. Something is spooking your lender if they're not even willing to lend a single turn of EBITDA.
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Reply by a lender
from University of Missouri in St. Louis, MO, USA
How consistent is the $700k in ebitda? TTM only? Or has it been doing well previously? If it is longer than just the TTM period you should be able to get away with 90% leverage on this deal.
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