⚡ TL;DR:

Earnouts are everywhere in lower-middle-market deal talk, and almost nowhere in closed SBA 7(a) files. SOP 50 10 8 prohibits the classic contingent earnout structure on any 7(a) loan. But the underlying problem earnouts solve, a price the buyer and seller cannot agree on today, does not go away.

Inside: the exact SOP language that kills the traditional earnout, the three workaround structures that do clear SBA underwriting (seller note with performance standby, escrow holdback, reverse-earnout price reduction), and when to use each.

Read: SBA 7(a) Earnouts — The Rules and the Alternatives →

An owner-independent, two-location medical and wellness practice in Las Vegas, NV. $2.79M revenue, $616K SDE, with a team of nurse practitioners, medical assistants, and administrative staff already running day-to-day operations. The listing explicitly notes owner financing is available — a structural edge in a week where we are covering SBA earnout alternatives.

Why this deal stands out: Two locations, a fully-staffed clinical team, and a nurse-practitioner-led model means this is not a single-provider practice dependent on the seller's license. The 1.98x DSCR gives comfortable debt coverage at ask, and owner financing availability lets a buyer address any valuation gap through a seller note — directly relevant to this week's deep-dive on SBA earnout workarounds.

💡 EBIT Take: Medical practices with physician extenders (NPs, PAs) transfer more cleanly than single-physician groups because the revenue engine is not tied to one credential. Diligence must-haves: payer mix analysis (commercial vs. Medicare/Medicaid), NP supervision agreements, and patient retention through transition. The owner financing signals a seller who wants the deal to close — use that as leverage on price or structure. Las Vegas healthcare demand is growing with the city's population trajectory.

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A multi-generation North Carolina commercial landscape installation and maintenance business, running semi-absentee with 35 employees in place. $4.85M revenue, $968K SDE, with a revenue mix of 65% commercial installation and 35% recurring maintenance. E-2 visa ready for qualified international buyers. The owner-absent operating structure transfers directly to the buyer.

Why this deal stands out: Owner-absent structures with 35 employees already running the book are rare at this scale. 2.01x DSCR at full asking gives comfortable debt service coverage, and the 65/35 install-to-maintenance mix provides a recurring revenue base that smooths the seasonality typical of landscape businesses. Multi-generational ownership usually means long-tenured field managers who are not going anywhere.

💡 EBIT Take: Semi-absentee at 35 employees is the closest thing to an operator-optional trades business that exists. Diligence priorities: employee tenure (target >5 years average for the field managers), commercial contract transferability, equipment condition and capex cadence, and how much of the install pipeline is contracted vs. bid-to-bid. The maintenance contracts are the sticky revenue — understand their renewal terms and whether they transfer automatically. Strong fit for a platform builder or a first-time acquirer who wants a management team in place from day one.

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An Orange County OEM of branded recreational products, 30+ years in operation, with $3.14M in revenue and $633K SDE in 2025. Two established brand names sell through Amazon, direct-to-consumer e-commerce, and a nationwide + international B2B distributor network. SBA pre-qualified through multiple Preferred Lending Program (PLP) lenders — the owner is retiring.

Why this deal stands out: Two recognized brand names means you're buying positioned shelf space, not just revenue. Diversified channels (Amazon + DTC + B2B distributors) de-risk single-channel concentration, and 30+ years of operating history through multiple cycles signals durability. At the $2.125M ask against $633K SDE, the multiple is 3.4x — reasonable for an established manufacturer with SBA PLP pre-qualification. The structure works clean: $252K down, ~2.09x DSCR at full ask with 90% SBA financing, and roughly $330K of cash flow after debt service. Owner is retiring after three decades, so transition support should be on the table.

🧭 EBIT Take: A 30-year branded OEM at 3.4x SDE with SBA PLP pre-qual is a rare structure — most brokers list manufacturers at 4–5x. The risk to underwrite is concentration: who are the top 10 B2B distributors and what percent of revenue do they represent; what share of Amazon revenue is a single SKU; what's the manufacturing lease term and equipment condition; is there meaningful IP (patents, registered marks) protecting either brand. If those come back clean, this is an SBA-friendly platform with natural bolt-ons in adjacent recreational categories — and the stable 3-year SDE trend ($571K → $671K → $633K) makes it easier to underwrite than a business showing step-function growth or decline.

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A 30+ year Houston-area safety and security installation business with a dual-revenue model most competitors do not replicate: direct-to-consumer installation services (baby proofing, pool safety, whole-home safety) combined with a nationwide dealer training and certification network. $2.22M revenue, $568K SDE. $247K of FF&E and $65K of inventory are included in the $2.3M asking price. Owner is retiring; established management team stays through transition.

Why this deal stands out: 30+ years of operating history in a large metro, with a model that is harder to replicate than it looks — most safety installers do the direct consumer channel OR the dealer network, not both. The dealer training business is the structural moat: recurring training and certification revenue, plus a nationwide referral pipeline that feeds the direct consumer segment. Semi-absentee-capable with an established management team staying through transition means day-one continuity.

💡 EBIT Take: Safety services targeting new parents and homeowners is a demographically durable market — Houston population growth and new-construction cycles both feed demand directly. Diligence priorities: (1) customer acquisition cost trend and channel mix — is the business dependent on a single lead source or diversified, (2) dealer network revenue concentration and contract terms — a handful of large dealers can be the majority of that segment, (3) inventory turnover on the $65K of included stock and FF&E condition on the $247K, and (4) how much of the SDE reflects the owner's personal selling time versus management overhead. Retiring-owner situations create price flexibility if you ask for it.

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A 20+ year family-owned residential and commercial plumbing and HVAC provider operating across southeast Wisconsin, with a dominant position in the Milwaukee metro. $5.05M revenue, $800K SDE, and a 24/7 service model. Roughly 40% of revenue flows through steady General Contractor partnerships — a stickier, more predictable commercial book than pure residential service work.

Why this deal stands out: The big-ticket anchor of the week — a market-leading trades platform in a growing metro, with 40% of revenue locked into GC partnerships and a 24/7 service model that creates customer stickiness. Multi-decade family ownership usually means institutional knowledge, long-tenured technicians, and established commercial relationships that do not walk out the door.

💡 EBIT Take: The DSCR at full ask is tight at 1.38x — below our usual 1.5x threshold. Two ways to get the coverage to work: (1) negotiate the asking price down, which is defensible given the 5.13x SDE multiple is on the high end for regional trades, or (2) structure a seller note for 10–15% of purchase price on standby for 24 months, which adds breathing room to year-one debt service. Diligence: GC contract terms and renewal cadence, technician tenure and licensing transfer, and working capital requirements for the service fleet. A strong candidate for a structured deal rather than a straight SBA 7(a) at full ask.

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Disclaimer: Educational content only — not investment advice. Listings from third-party sources; accuracy not guaranteed. Do your own due diligence. Consult with legal, accounting, and financing professionals before making any acquisition decisions.