We've recently submitted an LOI - our third to date - that offered a static dollar value for the acquisition price with the following language:

The purchase price for the Assets would be $X (which is based on an earnings multiple of Y of 2022 adjusted EBITDA of $Z)

We got feedback from the broker that they expect that the earnings multiple is what will remain static throughout the exclusivity period, at the end of which the "final price" will be set based on LTM EBITDA. Is this standard? We've never seen this before. I understand from the sellers perspective if we are to go under LOI with a static price today, they'll lose any upside over the next 90 days of running the business. How is this normally accounted for in the LOI? To date, we've priced our offers based on performance through the acquisition period (i.e. based on LTM EBITDA of management projections through the end of the exclusivity period) but still express it as a multiple of today's LTM EBITDA.

In the case that you submit a static multiple instead of a static dollar amount, how does that work with an SBA loan if you're close to the DSCR limit? Presumably the term sheet won't wait for all of future revenues.