One Man LBO

The Honest Truth About Buying a Business with SBA Financing in 2026 I want to share what I’m actually seeing on the ground right now because I think a lot of people need to hear this. We broker SBA loans for acquisition entrepreneurs at Pioneer Capital Advisory. We’re in the trenches on these deals every single day. And candidly, the market has shifted in ways that would have been hard to imagine even 18 months ago. Let me give you a real example. One of our buyers recently submitted an LOI on an electrical services company at $4.6 million. That was already $300,000 above the asking price. His offer came back as the lowest out of 11 total offers. The top six bidders were in the $5.3 to $5.7 million range. His exact words to me were “it’s wild out there.” He’s right. That’s not an outlier. That’s the new normal. Here’s what I’m seeing from a deal structure standpoint across our active pipeline: Multiples have pushed higher than most buyers expect going in. We had a home health deal come across at 5.0x SDE and the lender actually called that valuation “defensible.” A year ago most lenders would have pushed back hard on anything above 4x in that space. The DealStats median EBITDA multiple for comparable industries is sitting at 4.62x right now. Quality businesses with clean books and recurring revenue are trading well above that. The competitive LOI process has become the standard, not the exception. Brokers are collecting offers and presenting all of them to the seller simultaneously. We’ve had buyers lose deals to strategic and industry acquirers who already have relationships with the seller. If you’re a first time buyer going up against someone who already owns three locations in the same vertical, you need to understand what you’re walking into. Earnest money is a whole different conversation now. We’re seeing sell side brokers require 1% to 2% deposits just to enter exclusive due diligence. One deal required the deposit within five business days of LOI execution. Another required a 2% escrow deposit before the seller would even grant exclusivity. Some brokers are running a “first to go hard wins” process where the buyer who converts their refundable deposit to nonrefundable first gets the deal. That’s a meaningful amount of capital at risk before you’ve even completed diligence. The capital stacks on these transactions are getting more creative out of necessity. I’m seeing deals structured with 80% SBA financing, 10% seller equity rollover, 5% buyer cash equity, and 5% forgivable seller notes tied to performance metrics like customer retention. Buyers who show up with a clean, thoughtful structure and a lender who already understands the business are winning. Buyers who go direct to nine different banks and burn through relationships are not. From a volume standpoint, our team ran 51 meetings last week alone. We have 4 deals under LOI and 34 in the pre LOI pipeline right now. The deal flow is there. The demand is there. But the margin for error on execution is razor thin. So what does all of this mean if you’re trying to buy a business with SBA financing in 2026? It means you need to move fast, structure smart, and have your lending relationship locked in before you submit that LOI. It means you should expect competition on anything worth buying. It means earnest money is real and it’s going to be part of the conversation earlier than you think. And it means that the days of getting a quality business at 3x with minimal money down are, for the most part, behind us. I’m not saying this to discourage anyone. Acquisitions are still one of the best paths to business ownership and wealth creation. But I think the community deserves an honest picture of what the landscape actually looks like right now. If you’re in the market, go in with your eyes open.

My back-of-the-napkin deal math: 1. Take SDE and subtract your salary and benefits - now you have EBITDA 2. EBITDA x 3.75 = max SBA debt (roughly - depends on seller note terms) 3. EBITDA price multiple you're considering minus 3.75 = equity needed (ie: price is 4.5x - 3.75 SBA loan = .75x EBITDA needed in equity) 4. What EBITDA growth rate will it take to make 30% return on your equity in 5 years? If you believe that growth rate is realistic for you, and diligence supports the EBITDA etc, this might be a good deal!

Someone I’ve admired in business for a few years became an accounting client this week. I’m geeking out and honored to be in their corner.

When I tell you these people selling info products “borrow credibility” this is what I mean. “I just spoke to a guy” “My friend Steve”. “I just had someone on my podcast who”. They hope you blur your eyes enough that you start to view them as serious business people not entrepornographers.