with R&D tax credit consulting firm · R&D tax credit consulting firm
LenderHawk analysis. Not affiliated with or endorsed by Acquisitions Anonymous.
Buyers were attracted to the combination of high margins, a low asking multiple, and the possibility that annual contracts and repeat filings create subscription-like revenue. The panel liked the business more if the work is automatable and the seller reason for exit is truly exogenous.
A tax-credit consulting firm can look recurring on paper while still having a first-year-heavy customer lifetime value profile.
A 2.2x EBITDA asking multiple is compelling only if the buyer can verify that growth is durable and not seller-dependent.
Banks will scrutinize businesses whose revenue depends on government programs that can change by statute or administration.
For tax-credit firms, the quality of documentation is part of the asset because weak records can force expensive reconstruction work after closing.
A broad competitor set does not automatically make a point solution bad if the niche is specialized and repeatable.
A seller who cites health, partner/family, or lifestyle reasons is easier to underwrite than a seller signaling a top-tick exit.
Even when SBA is possible in theory, alternative lenders may be more practical for businesses with policy risk and fast growth.
The listing asked $6.55 million for a business with about $6.9 million of trailing revenue and $3 million of trailing profit.
The hosts read the Acquire.com teaser and compared the asking price to the stated financials.
The teaser implied a 2.2x profit multiple and roughly 1.0x revenue multiple.
Heather read the listing economics aloud before the panel analyzed the deal.
The business was founded in May 2019 and had 47 buyers in active conversations on Acquire.com.
The panel used the listing metadata to gauge age and buyer demand.
The stated customer contract term was two years with automatic renewal unless canceled 60 days before renewal.
The hosts used the contract terms to debate whether the revenue was truly recurring.
One panelist said the federal average SBA rate was around 10% to 11%, while an alternative lender discussed on the episode was said to charge about 20% to 23% over a 2- to 3-year term.
Andrew contrasted SBA-style financing with faster, more expensive non-SBA capital.
Andrew estimated that non-SBA lenders of this type might finance up to about $2 million on a deal like this, not the full $5 million an SBA loan might support.
The discussion focused on financing limits for a high-cash-flow service business with policy risk.
Verify how much of the customer value is collected in the first filing cycle before treating the business as recurring revenue.
Why: If most economics come from year one, the buyer may face a revenue cliff even with auto-renewing contracts.
Ask for detailed workpapers and time-tracking records before closing a tax-credit firm.
Why: The credits depend on proving qualified activity, and missing records can create expensive reconstruction work.
Underwrite policy-dependent businesses as if a change in law or enforcement could cut revenue materially.
Why: Tax-credit businesses face 'stroke of the pen' risk that lenders and buyers should discount.
Dig into tail liability provisions and indemnities for past filings.
Why: Prior credits can be audited later, and the buyer may inherit disputes or refund exposure.
Treat broad accounting-firm competition as a distribution question, not just a product question.
Why: A niche point solution may still win if the target customer is too small for full-service firms.
Use faster non-SBA capital only if the spread between cash flow and debt service remains wide enough after a shorter amortization.
Why: The loan can help you close, but the higher rate and shorter term still need to fit the business's actual durability.
Bill said Andrew told him his SaaS business was priced too low by about half, and after relisting at the higher price he received 11 bids and sold in 11 days. The anecdote was used to illustrate how much listing advice on Acquire.com can change seller outcomes.
Lesson: A credible pricing recommendation can materially change buyer interest and sale speed.
The panel described how some firms marketed Employee Retention Credit claims aggressively and then sold insurance against future clawbacks. They used it to highlight the difference between legitimate tax-credit consulting and businesses that may leave buyers with hidden tail risk.
Lesson: Tax-adjacent revenue can look attractive until audit exposure and post-close liability are fully mapped.