The sample spread

Harrow Creek Mechanical is a fictional HVAC company, built to show what a seller's discretionary earnings (SDE) Recast actually looks like once it is run: three years of tax returns spread out, the broker's SDE, and the buyer-side number next to it, with the gap between them explained line by line. A CIM (the broker's confidential information memorandum) is not required to see this; it only takes the tax returns.

Your lender will spread the same returns and size the loan off its own number, which starts from EBITDA rather than the SDE on this page. The SBA's new rules for business buyers shows how that number is built and what it has to clear. The check that produces the numbers below is described in what Probity deal diligence checks. A recast like this is the bridge section inside a full quality of earnings report, which also adds a proof of cash, a working capital calculation and a revenue-concentration review, and costs $10,000 to $40,000 depending on the size of the business.