HOW TO FINANCE THE ACQUISITION OF A RECENTLY STARTED COMPANY?
I am interested in acquiring a company that was started in 2019 and in 2020 earned $1M revenue at 50% net margins and they operate within a rapidly growing segment. However, the SBA lender with whom I usually work (Live Oak) has no interest in offering debt for this deal as the company is too young--they would like to see 2018 revenue that would cover the debt service--and my experience is that other SBA lenders have similar preferences. But maybe I'm wrong.
Has anyone made a successful acquisition of a young company that involved raising debt financing? I'd appreciate hearing your suggestions on what lenders are willing to lend against young company revenue.