Hi all,
Looking at an otherwise great deal that has ~50% concentration in 1 customer. Need some advice on dealing with it. I'm most likely going with SBA debt so a true earnout isn't likely (but feel free to convince me otherwise).
Options I'm considering:
- big forgivable seller note 20-30% (usually the max I've seen sellers entertain, but may still go bankrupt if lose big customer)
- huge forgivable seller note 50-60% (sized for DSCR of 1x in event of losing the big customer)
- if not bankable, attempt all seller financing
How else can I mitigate?
Can I ask to approach the big customer as part of the closing contingencies?
Would seller rolling equity help?
Any creative ideas would be much appreciated.
125 views
11 comments
Sign in to see all replies.
Create an account.