Who Makes the Rules on Valuing Small and Lower Middle Market Deals?

intermediary profile

November 10, 2023

by an intermediary from Gonzaga University in Tacoma, WA, USA

Spoiler, not industry experts.



Check out this recent video I posted for more.



https://youtu.be/7Ghlz6ALvag

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commentor profile
Reply by a professional
from University of Southern California in North Palm Beach, FL, USA
"Banks make the rules," is what you say, and that's generally correct. And there are a lot of dumb decisions made by lenders that buyers get to pay for. Also thanks to the government agency who seems to be setting expectations: SBA. (I rarely worked for anyone buying the kinds of businesses that require SBA financing.)

Buyers decide on the pricing of businesses for sale. Quite a few buyers overpay.

What matters the most? Realism IRT net cash flow and the relationships among the C.E.L.B.S. (my acronym)

How do I know this? Because for 30 years I ran a national business appraisal practice, and I can't remember any of my valuations that were rejected by lenders. Sometimes those valuations were the irrefutable remedy when sellers questioned what a buyer wanted to pay for their company.

just saying . . .
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Reply by an intermediary
from Metropolitan State University in Denver, CO, USA
The blended opinions of buyers, sellers, bankers and brokers opinion
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