Search Party Video-Podcast’s Post

Why leverage multiples 'jump up' at $5M EBITDA: Debt-seeking lower-middle-market dealmakers will find the availability of leverage does a step change when a company reaches $5 million in EBITDA, according to Conor Tidgwell, Senior Vice President at Avidbank. The size threshold is an important one for the Entrepreneurship-Through-Acquisition (ETA) market, because ETA searchers often source potential investment businesses making as little as $1 million to $2 million EBITDA. Tidgwell says companies with less than $2 million become "more challenging" to finance, because there is "less margin for error." Tidgwell estimates businesses generating around $2 million in EBITDA might secure leverage of 2 to 2.5 times EBITDA, while businesses over the $5 million EBITDA threshold may be able to secure 3 times leverage. Tidgwell's comments are part of a Search Party episode, "Deal Dynamics in the Lower-Middle-Market: Software, Commercial Services, Software," also including Dustin Sellers and Anthony Walker, Managing Partners at ETA private equity firm Next Coast Legacy. Search Party Lead Sponsor: Next Coast Legacy https://lnkd.in/eSAuRW5p  Search Party Sponsors: Avidbank https://www.avidbank.com/  Boulay https://boulaygroup.com/  Mayer Brown https://lnkd.in/gU7sPPSg  Plexus Capital https://plexuscap.com/  Search Party video-podcast website: https://lnkd.in/efJEa6GV Watch the full episode on Youtube: https://lnkd.in/e7VchGCc Spotify: https://lnkd.in/eGSArRbh Apple Podcasts: https://lnkd.in/eQFREcbe Search Party Lead Sponsor: Next Coast Legacy https://lnkd.in/eSAuRW5p Search Party Sponsors: Avidbank https://www.avidbank.com/ Boulay https://boulaygroup.com/ Mayer Brown https://lnkd.in/gU7sPPSg Plexus Capital https://plexuscap.com/ Search Party video-podcast website: https://lnkd.in/efJEa6GV #margins #EBITDA #eta #privateequity #financing

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