Capital Solutions · For owners
Below the largest transactions, the price a business achieves is usually set by what a lender will advance against it rather than by what a buyer is willing to pay. That number is knowable months before you go to market, and it is normally computed in week ten.
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Every buyer carries their own ceiling, set by the return they need. Every lender carries one too, set by how much earnings cover the debt service. Only one of those two is usually binding, and on transactions in our range it is almost always the lender's.
Which means the seller who understands the lender's test has an advantage that has nothing to do with negotiation. It is arithmetic, it is knowable in advance, and most of what suppresses it is repairable in a quarter.
01
What the purchase is worth to them at the return they are underwriting to. Moves with who the buyer is, and with how badly they want it.
02
What your earnings will service, after a coverage margin, over the available term. Moves with the quality and the durability of the earnings, not with the buyer.
03
The transaction clears at the lower of the two. Raising the one that is not binding changes nothing at all, which is why knowing which is which is the whole exercise.
What suppresses capacity
The analysis names them against your business rather than in general. These are the ones that recur, in roughly the order they cost owners money.
| Item | Why a lender marks it down | Window |
|---|---|---|
| Add-backs that will not survive | Earnings a credit committee will not accept are earnings that do not support debt, whatever the buyer agrees. Every dollar disallowed removes several from the capacity. | One to two quarters |
| Customer concentration | A coverage test assumes the earnings continue. One customer at a third of revenue is a test the lender applies twice, and prices for. | Two to four quarters |
| Owner dependence | If the earnings walk out with you, the lender is advancing against something that may not be there in year two. This is the most common cap and the slowest to fix. | Two to four quarters |
| Contract and renewal terms | Month-to-month revenue and annual contracted revenue support different amounts of debt at identical margins. | One to three quarters |
| Working capital and capex | Cash the business consumes before it services anything reduces what is available, and is frequently missing from the seller's own model. | Immediate, once modelled |
| Accounting hygiene | Books a lender cannot rely on get a haircut instead of a question, because the haircut is cheaper for them than the diligence. | One quarter |
Already published
An indicative capacity range appears on every valuation this site produces and on every listing on the marketplace, computed from figures already on file. No form stands between a reader and it, and nothing is charged for it.
The analysis is the next step rather than the first one: it takes the same question against your actual accounts, names what is suppressing the figure, and says what a repaired version of the business would support.
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Indicative only. Not a credit decision, an offer of finance, or a commitment by any lender.
Terms
Fee agreed per transaction and credited in full against any subsequent engagement fee. No retainer.
If the analysis says you should repair the business before going to market rather than engage us now, it will say that. That answer is worth more than the fee and it is the reason the fee is credited rather than charged twice.