Life changing opportunity, need a lender

James, a few things to sort out here before talking about lenders.

What you are describing is buying an existing business, a dealership with real revenue and cash flow. That is a business acquisition, and it is financed differently from real estate. The typical path for something like this is an SBA 7(a) loan, which is a Small Business Administration loan backed by the federal government that banks use to fund business purchases. With $450k in EBITDA (earnings before interest, taxes, depreciation, and amortization, basically the operating profit before those items are stripped out), a lender will want to see that the loan payment leaves enough cash left over each year. A common benchmark is that the business earns at least 1.25 times what debt costs annually.

The down payment on an SBA deal is usually 10 to 30 percent of the purchase price. I do not see a purchase price in your post, so I cannot say what that number looks like for you specifically. That figure matters a lot, because it determines whether your capital gap is $100k or $1 million.

The one thing worth knowing that you did not ask: lenders on business acquisitions look hard at your personal liquidity and your credit, separate from the business numbers. The seller staying on to train you is actually a positive signal to underwriters, and it is worth documenting formally.

A licensed business broker or an SBA-approved lender is the right starting point here, and a CPA who works with acquisitions should look at those financials before you commit to anything.

What is the asking price for the dealership, and do you know roughly how much cash you have available for a down payment? Those two numbers are where this conversation has to start.

The deal structure here matters before any lender conversation starts, because what you are describing is a business acquisition, and most commercial real estate lenders are not the right call. If the real estate is bundled into the purchase, an SBA 7(a) or SBA 504 loan is the more common route for a dealership acquisition with an attached property component. If the real estate is separate, those two financing paths split. A CPA and a business acquisition attorney need to look at the structure before you approach anyone, because how the deal is papered determines which lender pool applies.

The assumption doing the most work in your pitch is the $450k EBITDA figure. Lenders will recast that number themselves. They will pull out any owner compensation that is not being replaced, any discretionary expenses, and any one-time items. The number they lend against is the recast EBITDA, and on a dealership it is common for that figure to move. Get the last three years of tax returns and profit and loss statements from the seller before you sit down with anyone.

The risk you did not mention is the real estate versus business value split. Dealerships and shops carry significant blue sky value, meaning goodwill tied to the existing owner and customer relationships. A lender will want to know how much of that purchase price is hard assets and how much is goodwill, because they secure against assets, and goodwill is not collateral. If the seller's willingness to stay is what holds the revenue together, that is a dependency a lender will price into their terms or their answer.

Your operational background is genuinely relevant to a deal like this, and so is the transition arrangement with the seller. Document both in writing.

What does the purchase price look like, and how much of it is allocated to real property versus equipment versus goodwill?

The assumption doing the most work in this post is that passion and mechanical knowledge transfer directly into lender confidence, and that gap is where most of these conversations stall. A lender on a business acquisition this size is not evaluating whether you know ATVs. They are evaluating whether the cash flow can carry the debt service after a down payment, and right now the numbers you have posted raise a question that needs answering before a capital conversation goes anywhere useful. At $450k EBITDA and a $6.4m gross, the EBITDA margin is about 7 percent, which is thin for a dealership model carrying inventory financing, floor plan lines, and the fixed cost of a physical shop. What the business actually sold for, or is asking, determines whether $450k covers debt service at all. If the purchase price is, say, $2.25m (a 5x EBITDA multiple, which is on the low end for an established dealership), and you put 20 percent down, the remaining $1.8m financed at current SBA 7(a) rates produces annual debt service in the range of $240k to $270k, which leaves the business thin on coverage at roughly 1.6x to 1.9x, and lenders want to see at least 1.25x with cushion to spare.

The seller staying on is genuinely useful, not as a trust signal to a lender but as a structural tool. A seller carry on a portion of the purchase price, even 10 to 15 percent, subordinated to the senior lender, reduces the cash you need at close and can satisfy part of the equity injection requirement that SBA deals demand. Your LLC operating history from 2004 matters too, but a lender will want to see tax returns for that entity, and if it was dissolved or

What's the actual asking price on the dealership, because 450k cash flow on a 6.4m gross sounds thin and a business broker is going to price this at 4x-6x EBITDA minimum, so you're probably looking at 1.8 to 2.7 million before you even get to the down payment conversation. SBA 7a is the normal path for a business acquisition like this, 10% down if the deal qualifies, but the lender is going to want two to three years of your personal tax returns showing income, and "transitioning into real estate investing" needs to show actual numbers or the underwriter moves on. What does your current real estate portfolio actually produce on paper?

The owner staying on "as long as you need" is how every business sale describes the six weeks before the previous owner stops answering his phone.

The $450k EBITDA on $6.4m gross is a 7% margin, and any commercial lender is going to look at that and immediately ask what happens to that margin the first year you are running it without the institutional knowledge of whoever built the place. That is not an unfair question. SBA 7(a) is probably your path here, but they are going to want two to three years of your personal tax returns showing you can manage money, and a business plan that does not rest on "I know these machines." The plan has to show how you hold the customer base that came in because of the prior owner's relationships, not yours.

The thing nobody says until it is already a problem: franchise agreements. A lot of ATV/UTV dealerships carry Polaris, Can-Am, or Honda floor plan agreements that are not automatically transferable. The manufacturer has to approve you as a new dealer principal, and they will run their own financial review on you separate from whatever the seller and the lender are doing. I have seen deals fall apart at that stage because the buyer assumed the inventory financing transferred with the keys. Find out which brands are on that floor plan before you spend another hour on lender conversations, because if Can-Am does not approve you, the revenue number you are quoting is not the same business anymore.

That 7% EBITDA margin on 6.4M gross is the number I would be sitting with before anything else, because for a dealership doing that kind of top line it is thin, and a lender is going to want to know exactly where the margin is going. Flooring costs, parts inventory carrying costs, warranty charge-backs from the manufacturer, technician payroll, any of those can swing a dealership from 450k net to breakeven faster than most people expect, and if the seller has been the one holding those relationships together for years, the cash flow you are buying may not survive the transition even with him staying on.

What is the actual purchase price, and how much of that 450k is tied to manufacturer incentive programs or fleet accounts that follow the seller personally rather than the business entity?