The U.S. small business market did $7.95 billion in transactions last year.
Median sale price: $350,000
Median cash flow: $158,950
Median revenue: $703,000
Buy a business doing $158K in cash flow for $350K is what the numbers say.
With 10% down and SBA financing, that's $35,000 out of pocket.
You guys hate these transactions, but this is the real economy...
Another CPA firm (<5M EBITDA) just got an IOI at 12X. 80% cash at close.
Twitter still in disbelief. They didn't believe me last time when one sold at 10X and won't believe it again this time at 12X.
Meanwhile, if you have a firm that's dialed in and doing 7-figures of EBITDA, let me know if you want to sell!
I know who is paying.
Acquisition entrepreneurs spend hours, days, even weeks trying to figure out if a deal will qualify for an SBA loan.
⏲️Time is the scarcest resource in a search.
Here are 5 simple qualifying questions that will tell you very quickly if a deal is "generally" SBA financable:
1⃣Total debt / EBITDA < 3.75x (of adj EBITDA)
2️⃣ Buyer can bring ≥10% cash equity
3️⃣ No customer >20% of revenue
4️⃣ Revenue & adjusted margins flat or growing (not declining or highly inconsistent)
5️⃣ No major structural issues:
• highly seasonal
• seller too critical / not transferable
• significant industry headwinds
• technical industry, but buyer resume doesn't fit
If a deal fails 2–3 of these, it will usually struggle with SBA lenders.