When both the buyer and seller are committed, problems tend to work themselves out. I can’t remember a deal that was more dependent on commitment and follow-through than this manufacturing company acquisition in Florida.

This story is a real example of what happens when a transaction hits real-world roadblocks, but the parties involved stay focused on one goal: getting the deal across the finish line.

If you’re evaluating SBA loans or business acquisition financing, this is the kind of scenario where the “paper deal” either dies… or gets structured correctly to cash flow.

The Problem: The Location Was Wrong for Manufacturing (and the Rent Would Kill Cash Flow)

First, the company was located in a building that wasn’t best suited for manufacturing, but more for retail or a restaurant. The seller had owned the building for years and it was worth too much to add it to the purchase price.

If the seller leased the building to the buyer, he would have needed to charge an exorbitant amount to cover the property expenses. Once you added that rent to the operating costs, the deal simply would not have cash-flowed. That means it would not have been able to debt service the loan.

The Solution: The Seller Moved the Business to Save the Deal

The seller took it upon himself to find another location better suited for manufacturing and cheaper, so the buyer could cover the rent payment with the current cashflow of the business.

Not only that, but the seller also covered the costs of moving the company and all the machines, so the buyer didn’t have to bear those expenses. This mattered because the buyer was using essentially all of his cash to cover the down payment, and there wasn’t much left over for relocating equipment.

We couldn’t get those moving costs covered inside the loan either. Our lender was also limited to what the business was producing in cashflow. Without the seller stepping up, the numbers would not have supported the ability to debt service the loan.

Why It Mattered: Employees, Veterans, and Keeping the Team

The seller’s main motivation was his long-time employees, many of whom were veterans and had been with him for years. He knew this buyer would keep everyone employed. That was the biggest factor for him.

Bottom line: the seller was a good operator and a good person, and the buyer was loyal to the seller’s wishes.

Cash Flow Reality: Addbacks Had to Be Verified or the Deal Was Dead

One other key point: the seller had a lot of personal expenses rolling through the company that we had to verify in order to get this transaction to cashflow sufficiently. Without these addbacks, the deal was dead in the water from the start.

Once we had sufficient evidence, most of the items were allowed, which improved the numbers enough to debt service the loan.

Why Manufacturing Company Acquisitions Hit Roadblocks

• Facility fit matters: a location that isn’t built for manufacturing can create costs that destroy cash flow.
• Cash flow drives lending: if the business can’t debt service the loan, the structure has to change.
• Addbacks must be documented: unverified addbacks can kill a transaction fast.
• Committed parties close deals: when buyer and seller stay aligned, solutions appear.

What To Do If Your Deal Needs Post-Close Working Capital

Many acquisitions need working capital or a line of credit around closing, especially when operational changes (like relocation, equipment moves, or ramping production) hit quickly. The key is structuring the capital stack so the business can keep executing without choking growth.

Depending on the size and structure of the deal, that can include SBA financing, or in larger transactions, a hybrid approach like pari passu.

Closing Thoughts: Commitment Wins

We stayed in the game because we knew the buyer and seller were committed to getting it done no matter what. We didn’t feel like we were wasting our time because we knew there would be an answer for every roadblock, and there was.