% of equity required for conventional loans

by a searcher from Harvard University - Harvard Business School

2 years ago

I'm about to submit an LOI for a company that's too large for SBA financing. How much equity do conventional lenders typically require as a % of the transaction price? I can get the company at 5x EBITDA and the revenue is all contractual with the government and very steady month to month for the last 3 years. I'm confident I can get seller financing for 1/3 of the transaction, but am trying to gauge what debt:EBITDA conventional lenders are providing and how much they are requiring for equity as a percent of the deal.

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investor from University of California, Berkeley - Haas School of Business

Bank lenders will typically max out at 40-50% of project cost not to exceed###-###-#### 0x EBITDA. If the company has consistent EBITDA over $2M, you may be able to raise debt up to 4x EBITDA from an SBIC lender at ~ 12% interest.

2 years ago | like reply | 0 likes

lender from Northwestern University - Kellogg School of Management

Non bank lenders can likely get you to###-###-#### 5x of senior leverage. DM me if you are interested in having a conversation.

2 years ago | like reply | 1 like

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