Earnout and Financing

When buying a business, there are two areas of methodology that will assist with your purchase.

First things first. Don’t buy a business you cannot afford and don’t waste a seller or broker’s time with trying to steal a quality business for nothing because you heard some YouTube video say that you can buy businesses with $0 down.

Maybe there’s an example of such. But 9 times out of 10, you will upset the seller and the broker with that approach.

This is like buying a house. You have to have cash or a partner ready to go, to move on it, or someone else will.

To be serious, you want to focus on acquisitions that are within a reasonable multiple, and you want assistance on the deal.

Instead of trying to buy a $2mm business with limited cash down, buy a $800k business, with 20% down, use some traditional lender financing, and get some seller financing involved as well.

There are many ways to get a deal done.

Earnouts are part of the equation.

Most buyers are looking to come in with 50% cash and are hoping for the other 50% to be made up in another way.

Most deals get done when the buyer has closer to 90% cash.

Bridging the gap can be difficult.

There’s a lot of ways to bridge the gap but the quickest way is to understand there is an earnout and financing.

Earnouts can be based on a guaranteed monthly or quarterly or annual payment over X number of years or performance based, based on % of sales or EBITDA.

EBITDA is much harder to track than sales, so our suggestion is sales, if we are representing the buyer.

Financing can be done from the form of the seller in the earnout, or traditional loans.

SBA is a promising route. They have requirements such as a minimum credit score, and will need to see certain financials on the business including tax returns and P&L’s.

SBA will only allow for a certain % of seller financing in addition to the loan.

That’s where other lenders come in to play.

We have a lot of options to help you with the acquisition.
If you would like to hop on a call with us to go over things related to acquisitions and general business overview, please schedule a time here. We do a one hour deep dive where we go over your needs as it relates to acquisitions & business expansion, and then we go on the hunt for you to line up a business that fits.

Please reach out to us if you have any questions relating to acquisitions:

Email – acquisitions@jarbly.com

Phone – (800) 773-1523

Simply engage us below to get started whether it comes to bringing you qualified buyers where we list your business for maximal value or engaging us to bring qualified and vetted businesses that match your exact target criteria such as industry and EBITDA multiple if you are buying a business:

Buyer-Side Engagement – Retain Us to Provide you with Qualified and Vetted Businesses that Match Your Target Criteria

Seller-Side Engagement – Retain Us to List Your Business and Bring Legitimate Buyers to the Table

Leader in Business Consulting with Expertise in Representing Sellers & Buyers on Deals

Jarbly is a leader in business consulting with expertise in helping with revamped strategies, enhancing valuation, positioning for an exit, and business and real estate sales.

Contact Us

Phone: (800) 773-1523
Email: support@jarbly.com

About Jarbly

JARBLY’s focus is on business consulting with an emphasis on creating disruptive ventures and high quality boutique services to enhance a business’ valuation and lead to a high quality exit. As JARBLY has been heavily involved in the digital space including its own ventures for a decade with servicing hundreds of clients around the world, it is very well versed with understanding technical aspects of a deal including value proposition, product offerings, marketing, metrics, ROI, moats, and value-add initiatives. JARBLY has the expertise and knowledge on various businesses, industries, and deals and is very creative with structure to help increase valuation, or help guide you to a strategic exit. JARBLY has helped brands grow and also cultivates business related and real estate opportunities that are ripe for acquisitions, helping buyers and sellers get what they are seeking from a deal.

Whether it comes to growing your business, including acquiring businesses you want to understand the deal. We understand deals and where the maximal value in a transaction is. Our bread and butter is to provide a win for our clients including positioning your company for an eventual high quality exit. We have the unique and uncanny ability to bring high quality materials to the table and renewed strategies that consistently work. We help with financial enhancements, implementing systems, and prepping your business with materials including Prospectuses, Confidential Information Memorandums, and high quality Value Proposition Decks.

JARBLY looks forward to working with you to enhance your business profits nad valuation and help you on your next acquisition, exit, or real estate opportunity including both commercial and high end residential properties with high end service from a qualified team of passionate individuals that help you secure the deal. JARBLY LLC is part of Trend Realty in Sarasota, FL operating the Boca division as the JARBLY team.

Jaret will hop on a quick call with you to understand your and your business.

Text or call (800) 773-1523 and Jaret can arrange to have a brief consultation with you at your business location before embarking on a series of consulting calls or a full immersion.

Earnout and Financing