Main street (business)

Definition

The smallest tier of sellable businesses, priced on a multiple of SDE.

Why It Matters

Pricing, brokers, and buyers all behave differently here than one tier up: deals are smaller, priced on SDE, and sold through business brokers rather than bankers. Knowing which market your thesis actually shops in sets everything downstream, from the multiple to expect to the diligence a seller will tolerate.

In numbers: The SBA 7(a) zone, roughly a business selling for under about $5M, where an individual buyer and one lender do the whole deal.