It is allowed and can really help mitigate certain aspects of the deal.

Colin, in terms of the metric selected, can this metric be something like Gross Profit over a[redacted]month period? If yes, could the principal balance on the Seller note be adjusted downward if the GP doesn't meet the agreed upon metric? Might a simple Y=MX+B formula be allowed?

Donald, yes GP is usually a pretty good metric to use since it captures margin. Even this though can be played with depending on how you recognize your COGS so there is a potential for some disagreements (legal or otherwise) if the metrics are not down the road. On the adjustment this is a murky area and I think if you asked two different SBA field offices you might get two different or at least unequal answers. Simplicity is the key in this area. Much cleaner to do an all or nothing. I don't think a ratcheting down component would work, or at a minimum might require going through general processing v. PLP to get it blessed by the SBA. I would have to verify eligibility but it would probably be better to do two separate notes with different achievement metrics v. one note that is a moving target. We can get you an answer if you want to email me and discuss the details [redacted]