EBIT COMMUNITY · ISSUE #83
Six Deals. Two Very Different Kinds of Risk.
A Miami food importer reporting more than $1.1 million in cash flow, two working shipyards, and a decades-old specialty manufacturer can all look attractive on a cash-flow multiple. But that headline figure rarely captures the biggest risks after you take ownership.
This week, we picked six listings worth a closer look and called out one question we'd investigate for each. First, two useful reads: historical SBA default rates by industry and when to use your 401(k) to finance an acquisition.
FREE RESEARCH TOOL · INK INSURANCE
How Risky Is the Industry You're Buying Into?
Which has a better historical SBA loan-default record: a veterinary practice or an electrical contractor? Rather than guess, Ink lets you explore SBA loan performance by industry.
A seller's financials tell you about one company. Industry-level defaults offer a second, independent lens on risk.
Historical loan performance does not predict the outcome of an individual acquisition.
GUEST ARTICLE · FINANCING
Should You Use Your 401(k) to Buy a Business?
ROBS can preserve cash, reduce loan payments, or help you avoid outside dilution. The trade-off: more of your retirement wealth becomes tied to the very business that pays your salary.
Jonathan Roberts, co-founder of Talcott Forge / Nexus 401(k), walks through five questions to ask first, with a side-by-side example of financing a $2 million acquisition three different ways.
Six Businesses Worth a Closer Look
Ranked for operating history, business quality, capital requirements, and downside risks. These are seller- and broker-reported numbers, not verified earnings or acquisition recommendations. We use asking price ÷ reported seller's discretionary earnings (SDE) as a quick reference, not a substitute for a quality-of-earnings review.
★ DEAL OF THE WEEK · 01 / MIAMI, FLORIDA
Italian Food Importer & Distributor
$4.20M asking · $1.15M reported cash flow · ~3.7× asking/cash flow
Why it stands out: Established in 2016, the business sources roughly 1,000 SKUs directly from 25 Italian vendors and sells to about 50 wholesale customers, alongside a functioning e-commerce channel. The broker reports nearly $3.9M in annual revenue, 23% year-over-year sales growth, and approximately $1.15M in cash flow. There are tangible operating assets too, including delivery trucks and refrigeration equipment.
What we'd investigate: Is the reported cash flow sustainable after normalizing owner compensation, inventory carrying costs, shipping, and refrigerated logistics? How much working capital is needed to fund growth, and how concentrated are customers and suppliers?
Financing catch: The broker explicitly says SBA financing will not be available until April 2027 and is accepting cash offers in the meantime. That materially narrows the near-term buyer pool.
02 / ONTARIO, CALIFORNIA
Industrial Plastic Valve Manufacturer
$1.30M asking · $400K reported SDE · ~3.3×
Why it stands out: Operating since 1978, with patented products and established distributors serving specialized industrial markets.
Big diligence question: Are the patents and distributor relationships fully transferable? Also, the listing says roughly $100K of inventory is extra.
03 / PUGET SOUND, WASHINGTON
Two Full-Service Shipyards
$3.00M asking · $868K reported SDE · ~3.5×
Why it stands out: Two staffed yards, a 100-ton travel lift, 23 employees, and a general manager already handling day-to-day operations.
Big diligence question: Review environmental exposure, lift and equipment capex, waterfront property or lease rights, and whether 2025 earnings are repeatable.
04 / YAKIMA, WASHINGTON
40+ Year Restoration & Remediation Business
$1.90M asking · $622K reported SDE · ~3.1× asking/SDE
Why it stands out: Four decades of water, fire, and mold restoration, trained staff, and insurance-claims coordination, with real estate advertised as part of the offering.
Big diligence question: What is the real estate actually worth, how are occupancy costs treated in SDE, and how dependent is revenue on insurer referrals and the owner?
05 / TAMPA, FLORIDA
Natural Insect-Control Brand
$2.00M asking · $573K reported SDE · ~3.5×
Why it stands out: National retailer placement with Walmart and Ace Hardware gives a relatively young consumer brand unusual distribution reach.
Big diligence question: How much of sales depend on one chain or seasonal reorder? Validate sell-through, retailer margins, and the broker's SBA prequalification claim.
06 / MEMPHIS, TENNESSEE
Commercial Architectural Millwork Manufacturer
$1.50M asking · $450K reported SDE · ~3.3× business-only
Why it stands out: A business founded in 2000 making architectural millwork for commercial projects, with a dedicated production facility and specialized equipment.
Big diligence question: The listing calls it a real-estate transaction but separately values the property at $800K, not included in the $1.5M ask. Clarify total cost and normalized rent.
