Deal score

01 What it really earns

Annual revenue$

Net profit as reportedPre-tax, off the P&L or return$

Owner pay & payroll taxOne working owner$

Owner perksHealth, auto, phone, travel$

Interest expense$

Depreciation & amortization$

One-time & non-recurringOnly what you can document$

Cost to replace second ownerIf a family member works free, or you'll hire a manager$

Total addbacks—

SDE marginUnder 10% leaves no room for a bad year—

SDE—

02 Whether the price is sane

Asking priceExcluding inventory$

Inventory & assets at close$

Working capital you'll needPayroll and bills before cash starts flowing$

Closing costsLegal, valuation, appraisal, packaging$

Multiple of SDE—

SBA guaranty feeStatutory tiers — confirm the current year's schedule—

Total project cost—

03 How it gets funded

Equity injectionSBA floor is 10% on a full change of ownership%

Injection covered by seller standby noteCapped at 50%. No payments until the SBA loan is retired%

Rate accruing on the standby noteRolls into a balloon at the end. Set to 0 if it doesn't accrue%

Second seller note, amortizingOptional. Only the standby note counts as equity$

Rate on that note%

Its termYears

SBA loan ratePrime plus your lender's spread%

SBA loan termYears. 10 for goodwill, up to 25 with real estate

SBA loan—

Seller standby note—

Annual debt serviceStandby note pays nothing during the term—

Cash you write a check for—

04 What's left for you

Salary you need to live on$

Yearly capex to keep it runningTrucks, equipment, build-out$

Of each lost revenue dollar, how much falls out of SDEContribution margin. Higher for service, lower for resale%

SDE—

SBA debt service—

Seller note payments—

After debt—

Your salary—

Capex—

Cushion—

Coverage after your payLenders want 1.25x. Under 1.15x usually gets declined—

Return on your cash—

Years to earn the check back—

Standby balloon at payoffPrincipal plus accrued interest, due after the SBA loan—

If revenue drops	SDE	Coverage
Holds flat	—	—
Down 10%	—	—
Down 20%	—	—

05 What the numbers won't tell you

No customer is more than 15% of revenueConcentration is the most common reason a good multiple turns bad The business runs without the seller in itIf relationships live in his phone, you're buying a job with a loan attached Every addback is documentedAsk for the invoice. A lender will Revenue is flat or climbing over three yearsTwo down years reprices the deal The lease transfers with real term leftOr you're renegotiating from zero leverage on day one Licenses and permits transfer to youSome don't. Some take months Key employees will stayTalk to them before closing, with the seller's blessing Working capital conveys, or you funded it aboveAn asset sale usually strips AR and cash The seller stays on long enough to hand it over You've priced the equipment that's about to die

Cleared0 of 10

Deal score.

01 What it really earns

02 Whether the price is sane

03 How it gets funded

04 What's left for you

05 What the numbers won't tell you

06 Your pipeline