Looking for advice regarding possible deal structure for an opportunity on the radar. Company has a long history, retirement owner, but has been underperforming profitability. My background suggests that we can improve.

Revenue has been consistent in the $5M range for the past 3 years, but company is basically operating at breakeven net income. Broker indicated the seller understands seller financing and/or earnout will be necessary.

After the AR & AP wash out, Inventory is about $500K and the current FFE/Vehicles is another $500K.

Revenue doesn't have much concentration, but there is concentration in a couple (ie: vendors, sales team-member) other areas.

Any suggestions on deal structure to mitigate risk? Should I exclude using any bank debt and have the Seller hold everything? What amount should be S/N vs E/O? Or should I utilize bank debt, LOC, etc.? What % and/or amount would you provide as a down payment?

Happy to hear other's suggestions.