Make the case to your seller to carry a larger note at an increased rate and look at a cash sweep (50% or more) to accelerate his time to payback. Some sellers might have an allocation challenge from their windfall... hard to find a vehicle that provides an 8-9% "guaranteed" return anywhere else. I was able to do this to avoid borrowing from a bank or private lender altogether.

Ben, in general I agree with your post. Like you say, multiples need to come down to reflect the current rate environment. Sometimes hard to get a seller to understand that market interest rate impacts the value of
their business, especially when their buddies have exited their businesses at much higher multiples over the last few years. It’s a speed bump, but if you’re committed to searching your only option is to soldier on and make sure you structure whatever deal you do appropriately.

I do think some of the turmoil in the banking sector has caused an environment that is is different than the last 6-12 months. Anecdotally, I’ve heard of institutions pulling back on loan origination significantly. I think this underscores the importance of having multiple financing options already warm. Ability to finance and close may become an important differentiator if the uncertainty in the banking sector persists.