SBA Financing - Significant Add-backs to SDE

by a searcher from Boston College - Wallace E. Carroll School of Management

2 years ago

Hi, I'm currently looking at an add-on acquisition with about $200K in net income on the P&L but another roughly $175K in add-backs. I've done my diligence and believe the seller to be an honest operator - so I am fairly comfortable that these add-backs are valid.

My question is, does this amount/ratio of add-backs to SDE present significant issues with obtaining SBA financing? Aside from this potential obstacle, I think this deal is a fairly good fit for SBA financing but am unsure how much of an issue this is or isn't.

1 like
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39 comments

searcher from The University of Texas at Austin - Red McCombs School of Business

Can't answer your question directly but my experience with Live Oak Bank is that the underwriter was VERY easy to work with and very reasonable when things appeared "outside the box" on the surface. Maybe reach out to them and ask directly...I bet you'll get a decent answer.

6 months ago | like reply | 0 likes

searcher from Harvard University - Harvard Business School

Yeah.,.. it's going to be really hard to convince a bank of most add backs. mine had 0.

7 months ago | like reply | 0 likes

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