How do you finance a high customer concentration business?

by a searcher from Babson College - F.W. Olin Graduate School

3 years ago

I would like to make an offer for a Industrial supply business but a couple of long term customers account for ~50% of revenues. How would you structure the deal to make it "financeable"? The business generates about $750K in earnings.

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5 comments

lender from California State University, Sacramento - College of Business Administration

All really good preceding posts by Sam, Colin, Ron and Padraic

2 years ago | like reply | 1 like

investor from University of Virginia

If SBA, structure seller note with principal balance that ratchets down based on a performance metric of the key customers. Of course, talk with your SBA banker pre-LOI to confirm the details are acceptable.

3 years ago | like reply | 3 likes

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