A preview of the toolkit is below. Get the full PDF — criteria worksheet, deal-evaluation framework, financing primer, and a sample LOI — and we'll add you to our list so you hear about deals that fit.
Acquisition Criteria Worksheet
Define exactly what you're hunting for — so you can say no fast and yes with conviction.
Deal Evaluation Framework
How to read a CIM, what the multiples mean, and the red flags that kill deals.
SBA & Financing Primer
How most lower-middle-market deals actually get funded.
Sample Letter of Intent
The structure of a credible, seller-friendly-but-protective offer.
Define your acquisition criteria
The best buyers are specific. Before you look at a single deal, get clear on your box:
- Industry / sectors you understand
- Geography you'll operate in
- Revenue range (e.g. $2M–$20M)
- EBITDA / SDE range and minimum margin
- Deal size and equity you can write
- Owner involvement you'll accept post-close
- Recurring revenue requirement
- Deal-breakers (customer concentration, capex, etc.)
Evaluate the deal
When a Confidential Information Memorandum (CIM) lands, read it in this order — and value the business on normalized earnings, not the asking price.
What the multiples mean
- Most lower-middle-market businesses trade at 3–6× EBITDA (or 2–4× SDE for smaller, owner-run companies).
- Higher multiples reward recurring revenue, growth, low customer concentration, and a management team. Lower multiples flag the opposite.
- Always confirm the earnings base: adjusted EBITDA add-backs should be real, recurring, and defensible — not wishful.
Red flags to hunt for
- Customer concentration — one client >20–25% of revenue
- Owner is the business — sales, relationships, and know-how walk out the door
- Aggressive or unverifiable add-backs inflating EBITDA
- Declining revenue or margins masked by a single good year
- Deferred maintenance / looming capex or systems replacement
- Key contracts that don't survive a change of control
- Messy books, related-party transactions, or no monthly financials
Finance the acquisition
Most lower-middle-market deals are funded with a stack, not a single check.
- SBA 7(a) loans — up to $5M, often used for sub-$5M deals. Typically ~10% buyer equity, with the rest financed; a seller note can count toward equity. Personal guarantee required.
- Conventional / bank debt — senior loans against cash flow and assets, common above the SBA ceiling.
- Seller financing — a seller note (often 10–25% of price) signals confidence and bridges valuation gaps.
- Earnouts — tie part of the price to future performance, sharing risk on growth claims.
- Buyer equity — your cash in; lenders and sellers both want to see you have skin in the game.
Make the offer
A Letter of Intent (LOI) is non-binding on price but sets the tone. A credible LOI typically covers:
- Purchase price and structure
- Cash at close vs. seller note / earnout
- Asset vs. stock purchase
- Working-capital target (the "peg")
- Financing contingency
- Due-diligence period
- Exclusivity ("no-shop") period
- Owner transition / employment terms
- Key conditions to closing
- Confidentiality
Get the full Buyer's Toolkit
The complete PDF — criteria worksheet, evaluation framework, financing primer, and sample LOI. Tell us your box and we'll flag deals that fit, before they hit the open market.
For educational purposes only — not legal, tax, financial, or investment advice. Financing terms (including SBA program rules) change and depend on your situation and lender. Always engage qualified advisors before signing anything.