In a small leveraged buyout, the loan is the easy part; four numbers decide whether the deal works. Earlier this week I posted about the equity side. This explainer covers the rest, from the first broker call to the exit. The four numbers, from its illustrative company: 1. Price sets everything. Paying 4.0x EBITDA clears the bank's 1.25x coverage test at 1.33x; paying 4.5x fails it at 1.19x. 2. Verify the earnings. $250K of earnings that aren't real would cost $1.0M at 4.0x. 3. Day 1 cash is a separate bill. If the seller keeps the receivables, the buyer needs about $600K of cash or credit, nearly 3 times their own $213K. 4. Leverage cuts both ways. A sale in year 6 returns 21.0x the buyer's cash; a 35% drop in earnings wipes it out. Full version, with 16 diagrams, an interactive capital stack and a 90-second video: redacted If you've closed an SBA deal, I'd love to compare notes. Thank you again for taking me from 0 to 0.5. Educational only. Illustrative company, not a real deal; returns are sale proceeds before fees and taxes. The 1.25x test is one reading of the SBA rules, so confirm with your lender.