Underwrite a Deal
The Target
Verdict
Nothing has been submitted yet, so this reads the example in the form above: a $1,500,000 ask on $500,000 of earnings. Change the figures and the verdict follows them.
- WatchOwnership or licensing is restricted here
Many states license painting above a project-value threshold and some separate residential from commercial work, but Florida went the other way. It bars a local government from requiring a painting license, except rooftop painting above three stories where the local license predates 2021.
- Watch3 acquirers already consolidating this industry
Kept Companies, Cherry Coatings, Energy Services of America. Expect competition on price, and a plausible exit if you build something bigger.
- GoodDSCR after your salary is 2.29
Above the 1.25 floor the SBA sets for buying a business.
- GoodAsking 3.0x, inside the cited band
Priced where this industry trades.
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
- 1.81x–3.13x SDE
Context
- Deals financed (FY2020 through FY2025)
- 126
- Industry median loan
- $431,350
- Industry charge-off
- not measurable
- 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 have not had time to show their full failure rate. Rates are a lower bound (open loans can still fail), so read the ordering, not the level.
Licensing: Employ or retain a qualifying license holder where the state requires one; confirm the thresholds and classes for the work actually done.