Looking for lenders that can help me finance a deal with high Add-backs.

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July 22, 2021

by a searcher from IE Business School in Dallas, TX, USA

Purchasing a Commercial Cabinet and Millwork manufacturer. Have gone the route of SBA, and the high amount of add backs have made the deal nearly impossible to do. Seller has used his business to pay for other business ventures, personal charges, and children's tuition. Looking for lenders more willing to dive into add backs to determine true cashflow to find better structure to close the deal. Transaction is $1.5M



Thank you
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Reply by a searcher
from Clemson University in Greenville, SC, USA
We had a similar issue with the SBA on a deal recently. One way we got around the add backs was the adjusting the debt. The SBA looks at the Debt service coverage ratio. In this particular case, we had the seller holding a note and were able to negotiate the note terms to make the DSCR work for the bank. If you are in a similar situation DM me and I am happy to discuss.
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Reply by a searcher
from University of Arizona in Phoenix, AZ, USA
Brandon, you might try Jerry Freedman (https://www.linkedin.com/in/jerryfreedman). If it’s doable he can make it happen. You can mention I sent you.
best,
jason
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