5d • General discussion
I had a signed LOI and the lender still killed the deal.
I sat in that call for 45 minutes while the underwriter walked through his questions.
He was not mean about it. He did not have to be.
Every question he asked was one I should have asked first.
Customer one represented 31% of revenue. Customer two was 26%. The top 5 clients were 74% of everything the business made.
I knew that number. It was right there in the P&L. I had looked at it and kept going because the SDE was clean and the seller was motivated.
The underwriter did not keep going.
He stopped the deal cold. Not because the business was bad. Because the risk was concentrated in a way that a lender cannot ignore and a buyer should not either.
I lost that deal in due diligence.
Not from fraud. Not from a hidden liability. From something I saw and chose not to sit with long enough.
The most expensive mistake in a small business acquisition is not missing something. It is seeing something and deciding it probably will not matter.
It always matters.
Before you sign an LOI, ask yourself one question: would I lend money on this deal?
If the answer makes you hesitate, the lender will find out why.
Comment LENDER below and I will send you the exact 6-point screen I run on every deal now, before ink hits paper.
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I had a signed LOI and the lender still killed the deal.
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