Hi guys - I just submitted an LOI on Friday that will most likely get turned down due to value and I am thinking through my options on a response. The seller and broker are asking 3.91x 2021 SDE / 4.95x 2021 Adj. EBITDA, but my SBA lenders do not believe the business will appraise at this value. They are taking a 3-year average of SDE and the business had a large pop in growth in 2020 and backed it up with another very good###-###-#### The problem is 2019 numbers were significantly lower and are bringing down the lenders' value by a wide margin. Underwriting a Covid-affected business (positive or negative) could be a whole separate conversation, but in short I believe their current EBITDA levels will be sustainable.

My initial bid came in at 2.93x SDE /3.71x 2021 Adj.EBITDA and I would be comfortable moving up to###-###-#### 2x Adj. EBITDA, but at that price I will most likely lose support of my lenders. I think that higher price is fair, and I am actually putting two companies together, so with synergies it's really a pretty good price.

Has anyone wanted to bid higher on a company but their lenders were holding them back a bit? I've starting thinking through alternative means of financing but it will certainly come at a higher cost. I think I could get the deal signed at###-###-#### 2x but will lose my financing. Any thoughts or ideas? Thanks in advance.