Underwrite a Deal
The Target
Verdict
- WatchOwnership or licensing is restricted here
Sales require a state or local license; quota jurisdictions cap license counts and transfers need regulatory approval.
- GoodDSCR after your salary is 2.29
Above the 1.25 rule of thumb.
- GoodAsking 3.0x, inside the cited band
Priced where this industry trades.
- GoodIndustry charges off at 1.98% against 4.20% across all industries
SBA acquisition loans in this industry fail less often than average.
The Number That Should Set Your Offer
At $500,000 of SDE, a $100,000 owner salary, $200,000 of cash, and a 10% seller note, the most this business can carry at a 1.25 DSCR is $2,561,235. The ask sits $1,061,235 under it.
Structure
- Equity (your cash)
- $200,000
- Seller note
- $150,000
- 7(a) loan
- $1,150,000
- Annual debt service
- $174,813
- DSCR
- 2.29
- Implied multiple
- 3.00x
- Cited band
- 2.2x–4x SDE
Context
- Deals financed (FY2020 through FY2025)
- 1,301
- Industry median loan
- $742,500
- Industry charge-off
- 1.98% (all: 4.20%)
- State median loan
- –
- State FY2025 loans
- –
The median is a loan, not a price: equity and seller notes sit on top. Charge-off rates come from the seasoned cohort only; FY2020+ loans are too young to have defaulted. Rates are a lower bound (open loans can still fail), so read the ordering, not the level.
Licensing: License transfer is a closing condition with a months-long timeline in many jurisdictions; verify class and violations history.