I’m going through this process now. Company price $890k, 3x multiple. SBA lenders are looking for more personal liquidity than you mention, even if the seller is willing to do a 10% note. They are wanting me to have 10% post close liquidity on hand AFTER being able to cover 10% down. So essentially 20%. I’m sure it’s temporary based on the current climate, but this is what I’ve seen from multiple SBA lenders so far.
I’m going through this process now. Company price $890k, 3x multiple. SBA lenders are looking for more personal liquidity than you mention, even if the seller is willing to do a 10% note. They are wanting me to have 10% post close liquidity on hand AFTER being able to cover 10% down. So essentially 20%. I’m sure it’s temporary based on the current climate, but this is what I’ve seen from multiple SBA lenders so far.
Yes, this makes sense. Could you raise some capital from private lenders? You'll have to sell off equity a bit but could get the deal done?
For this opp, the timing wouldn’t have worked. They had some other offers on the table. I’ll definitely look into it for the future.