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.