If you've been watching the M&A space recently, you've probably seen the headlines:

Sounds like chaos, right?

Let’s clear this up — because at Acquire Weekly, we work with serious buyers every day, and here's what we're really seeing:

Over the last 90 days, SBA lenders — especially major players like Live Oak, Huntington, and Wells Fargo — have gotten stricter on what deals they’ll approve.

Why?

Because they’re more cautious about risk and debt load. Here’s what they want now:

• More buyer equity (15–20% instead of 10%)
• More seller financing
• Lower debt-to-income ratios
• Higher Debt Service Coverage Ratio (DSCR)

DSCR = Net Operating Income ÷ Annual Debt Payments

This ratio shows how well a business’s profits can cover loan payments.

A DSCR of 1.25x means you have $1.25 in income for every $1.00 in debt obligations — a healthy margin.

But banks are now looking for 1.5x+ in many cases. That means thinner-margin or high-debt deals won’t get through.

Here’s the hard truth:

If a deal only worked when DSCR requirements were loose…
It was never a strong deal to begin with.

If the loan barely got approved under a 1.25x DSCR, what happens if:

• Sales slow?
• Costs rise?
• Your ramp-up takes longer than expected?

You’d be stuck making debt payments with zero margin for error.

At Acquire Weekly, we’ve helped buyers navigate hundreds of deals — and the best ones always passed a worst-case scenario test.

Whether we’re sourcing a med spa or a plumbing company, we look at the downside, not just the upside:

• What if revenue drops 15% after acquisition?
• What if payroll costs rise by 10%?
• What if it takes 6 months longer to replace the owner?

If the business still cash flows and covers debt under those assumptions, we move forward.

If not — we walk.

This mindset builds anti-fragile portfolios.

One of our recent clients looked at a car wash listed for $1.2M with $300K SDE.

Old SBA rules: He could’ve closed with $120K down.
New SBA rules: Needs $180K down and seller to hold a $200K note.

Result?
• He negotiated the seller hold.
• Added a working capital clause.
• Got lender approval — no drama.

Strong deals find a way. Weak deals get exposed.

Yes, the lending environment is changing.
No, it’s not a death sentence for acquisitions.

In fact, this is when the best buyers shine — because they underwrite deals with discipline, creativity, and real risk tolerance.

If you do the same, you’ll keep closing great deals — even while everyone else complains on Twitter.

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Let’s help you buy better — and safer.

—
Jorge Viveros & Rahul Issar
Co-Founders, Acquire Weekly
www.acquireweekly.com | Your Partner in Buying Better Businesses