Acquisitions Anonymous - #1 for business buying, selling and operating - The Fastest-Growing Factory You Can Buy Online

Episode Date: May 1, 2026

In this episode the hosts break down a high-margin American manufacturing business selling industrial coating ovens—and explore whether its explosive growth and low multiple signal opportunity or hidden risk.Business Listing – https://Quiet Light.com/listings/18828343/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.Looking to build a professional website in minutes? Try Wix: https://wix.pxf.io/c/6898629/3115214/25616?trafcat=templateHubSpot is the backbone for how businesses scale without chaos. Try them out here: https://go.try-hubspot.com/OeG9VrSubscribe for more episodes: https://www.youtube.com/@AcquisitionsAnonymousPodcast?sub_confirmation=1Subscribe to our Newsletter: https://www.acquanon.com/newsletter💰 Sponsored by:Quiet Light Brokerage specializes in helping entrepreneurs buy and sell businesses with experienced operators as brokers. They offer a free valuation clarity call to help owners understand what their business is worth and how to increase its value before selling. Learn more at https://quietlight.com/FRANZY - Thinking about buying a franchise instead of an independent business? FRANZY is a free platform built for acquisition-minded entrepreneurs who want to explore franchise ownership without broker bias. FRANZY matches you with franchise opportunities based on your capital, goals, and lifestyle—and includes free coaching from experienced franchise operators. If you're exploring ETA but want a structured, system-driven alternative, check out https://franzy.com/ This episode dives into a fast-growing U.S. manufacturing company that produces powder coating and Cerakote curing ovens used in industries ranging from hobbyist workshops to major industrial players like aerospace and defense contractors. The business generates approximately $4.8 million in revenue and $2.7 million in EBITDA, an eye-catching 57% margin, and is listed for roughly $11 million, or about 4x earnings—a surprisingly modest multiple given the growth trajectory.Key Highlights:- $4.8M revenue / $2.7M EBITDA with ~57% margins- Asking price around $11M (≈4x EBITDA)- Manufacturing facility located in a rural U.S. region requiring on-site leadership- Growth driven primarily by organic search and minimal advertising spend- Financing structure may require SBA + pari passu loan combinationSubscribe to  weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking hereDo you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.Do you enjoy our content? Rate our show!Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.For inquiries or suggestions, email us at [e-mail]

Hello, everyone, and welcome back to another episode of Acquisitions Anonymous. This is the Internet's number one podcast on buying, selling, and operating small businesses. I am one of your hosts, Bill Dallessandro, and today I am with Michael Girdley, Heather Anderson, and Chelsea Wood from Acquisition Lab. And we are talking about a very cool deal. It is a manufacturer in the heartland of America, and they make ovens for powder-coating and sarah-coding metal-pubing. products. So this is kind of your classic Made in America manufacturing. They make ovens that go into other manufacturing processes. This business has $2.7 million of EBITDA on about $5 million of sales. So incredible margins. It's a manufacturer. It is also a good candidate for an SBA

Perry Pesou loan. So we get into some very interesting details around that with Heather about how to structure one of those. It's also an e-commerce business from our friends at Quietly. So just love this deal, a lot to talk about. I think you're really going to enjoy this episode of Acquisitions Anonymous. This episode Acquisitions Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory long. This episode of Acquisitions Anonymous is brought to you by Quiet Light brokerage. And I'm sitting here to tell you I have both sold businesses with Quiet Light and bought businesses from Quietlight. And in my opinion, they are extremely high quality people, very, very

rigorous, and they're really straight shooters. One of the things that differentiates Quietlight is every single broker at Quietlight has been an operator. They have been an operator of an active business and they have sold it. Many of them have also bought businesses. So they really understand what it means to be in the seller's seat and how important that is to you. And they also really understand what it means to be in the buyer's seat. So they don't BS you, but they don't BS you, but they really do know how buyers think. All of the transactions I did with Quietlight, in fact, one of them, they took over a sale process

that another broker had not been able to get done, and they got it done for me inside of 90 days. So I've had very positive personal experiences with Quietlight, and I do recommend them wholeheartedly to a lot of people, and now they're sponsor of the podcast. So one thing you can get for free is if you head over to Quietlight.com, they will do a valuation clarity call with you, which is not a sales call.

They're not pushy people. they'll just kind of tell you, hey, here's what your business is probably worth, and here are a few things you could do to make it worth more. And hey, maybe don't sell it right now. Do these things. Come back to us in six months and you'll get a much better multiple. So if you're thinking about selling your business or you're thinking about buying a business, especially in the e-commerce space where they're very, very strong, I've been doing this for over a decade. Go check out Quietlight brokridge over at Quietlight.com. All right. Can I tell you guys something awesome? Let's hear it. So I drive a 2017 Subaru with 100,000 miles,

mostly because I refuse to go into car dealerships. I hate to deal with car dealers because it feels like you lose every time. But anyway, so last week, it started vibrating, like heavily when I was driving. And it would have this, like, vibrating thing. So my son, who is amazing and 20 years old, I said, hey, why don't you take a look at it? And his hobby is to renovate and repair cars. He discovered it was the radiator fan and went and ordered the part on the internet.

it showed up, and then today he replaced the radiator fan in our garage. So what would have probably been like a thousand dollar expense if I took it to a dealership or whatever? He just did it for 120 bucks. Nice. That's awesome. And he sleeps in our house and eats our food. Did he use AI to teach him how to do it? Yeah, he just figured it out. But he says he uses chat GPT and that sort of stuff to look at the items that he wants to have done.

So he double-checked it with this. I've been amazed at how you can take pictures of things and upload them to, I use Claude, upload them to Cloud, and it'll tell you what's going on. It walked me through like fixing my furnace. I saw that. It was crazy. It kind of almost went viral for that, Bill.

Yes, for the dehumidifier I put in my girl space with the help of Claude. You're going to die. No, it's good working. It's working. It's so cool. Yeah, the HVAC bros are very mad at me. because they thought they were safe from AI,

but they're not safe. Nobody's safe. But it's very cool. If you are at all DIY inclined and there's something in your house, like you literally just take a picture of it and put it in claw and go, help me fix this. It's very good. Like bikes, appliances,

anything. It's very cool. I don't think it can help me. You might be too far behind Heather. It's true. It's true. A horse. Oh, the leg looks broken.

Fix this. So, Bill, you have a claw bot installed at your house. I do. Like an open claw bot. Do you, ladies, either one of you have one? Nope. This will blow your mind. You've got to do it.

I know. But every weekend, I think, maybe I'll play around with it and then I find better things to do. Like, I have mine connected to my Slack and I'm like, hey, here's this business problem I have. Solve it for me. And it'll be like, be right back. I'm going to work on that. And then it solves it for you. He's like, okay, I created a cron job.

Every day I'm going to do this for you. And then let me know if it doesn't work and I'll change my algorithm. Like, it is ridiculous. All right. It's really cool. Once Heather hooks it up to her email, then I'll say, attention, Heather bought, give me a loan. Everything underwrites. It's great.

Sounds simple. That sounds great. Love it. Prove the loan. I do. So Heather, I actually do have a friend doing underwriting with AI. This is pretty interesting. He owns a consumer.

lending company. And they're like a debt consolidator. So they're, you know, very frequently underwriting consumers. And there's a big underwriting package. Check a whole bunch of boxes. And he had a team of 20 people doing underwriting. And he recently dismissed almost all of them and has replaced the underwriting process with AI. Because as you can imagine, there's like a package and a checklist. Right? And it's, he said the thing that converted him was when his, his human underwriters had approved a loan, but then they were trialing it and passing it back through the AI, and the AI rejected it. And they figured out the AI rejected it because there was a utility bill in the package that looked normal. But the logo of the utility, that utility

did not provide service at the address. It caught fraud, basically. And yeah, it was a fake utility bill. But a human would have never caught it, ever. That's pretty convincing. Well, here's what I would say in the small business space that I'm, where I remain a little unconvinced or skeptical, it's garbage in garbage out still. And I think the main thing that we do in small business deals is sort through what is, you know, actually reliable information versus what is probably not. And I don't know how to teach Claude to do that, but maybe I should learn. Maybe I should I think underwriting a business loan is orders of magnitude more complex than underwriting a personal loan, you know, just validing documentation and checking boxes. I think,

hopefully you and all of us are safe for a little while longer when it comes to evaluating a little while. A little while. Yes. Well, speaking of making investments in businesses, I found a fun one today. It is from our friends over at Quietlight brokerage. So this is an e-commerce deal, but there's more to it than that. So you guys want to hear it? Yeah. All right. So this is, of course, an SBA pre-qualified with Perry Pesu, which is an interesting wrinkle. So, Heather, I'm going to have you expound on that later. SBA pre-qualified with Perry Pesu, made in the USA a powder-coating and saracote oven manufacturer, $2.7 million of SDE, and 5.6x revenue growth. So this thing's growing really fast. It has

$4.8 million of revenue and $2.7 million of income, which is pretty impressive, better than 50% margins. They're asking 3.95X for it, 4X, which makes it 10.95, just under $11 million for this business. It says the company designs and manufactures curing ovens and spray booths for the powder coating, seracoding, and related finishing industries. Founded in 2016 by an engineer-turned entrepreneur with a background in mechanical and electrical engineering. The company builds entirely in the U.S. and ships to customers ranging from garage hobbyists to Fortune 500 industrial operations, among them SpaceX, Lockheed Martin, Western Digital, and Caterpillar. With NASA placing its first order in March 2026. How's that for a customer list? Wow. This is sounding good.

With over 80 skews across build to order and in-stock configurations, the company offers one of the broadest catalogs in the space, refined over nearly a decade of customer feedback. The company has compounded revenue nearly 5.6x in five years, from 860k in 2021 to nearly 4.9 million TTM, generating a TTM SD of nearly 2.8 million and an exceptional 57% SDME margin. That growth was achieved on advertising spend of just over 1% of revenue in case you were not already excited. Built on dominant organic search rankings in a niche where new entrants rarely survive, a new owner requires this proven cash-generating operation, with paid advertising, outbound sales, and social media still largely untouched.

Pre-qualified for SBA 7A financing up to $5 million, qualified buyers may also potentially access an additional $2.5 million to $3 million in Perry-pursue conventional lending beyond the SBA cap. The business process is over 80% of orders through a fully built e-commerce storefront without a salesperson, supported by a six-person production team, managing manufacturing from CNC cutting through final assembly and freight. So they manufacture, it seems like they manufacture their own stuff with a six-person team here in the States. Pretty impressive. The acquisition transfers cleanly.

A lead manager is in place. The seller commits to a smooth transition, and the business carries no outstanding liabilities or legal matters. With a warranty claim rate under 1% and an uninterrupted growth through COVID and the 2025 tariff environment, a company offers a durable cash flowing foundation with several immediately actionable pass to growth. Again, this is listed by the folks at Quietlight. Pat Yates is the advisor over there. What do you guys think about this business? Chelsea, if you run into a business like this before, if so, do you know what they do?

What do they do? Are you excited to be like of an idiot? I am super fascinated because I've not seen a manufacturing company presented as an e-commerce company before. And so this is just a new positioning strategy that I've not familiar with, right? I think I get it, right, because they're selling things through an e-com platform. But in my brain, I'm having a hard time positioning it as not manufacturing. And I have like a thousand questions about manufacturing. But it sounds like this is an oven maker and spray booth.

Yeah. So powder coating and syracode, is that like the, if you want to like paint something and like, like, let's say you have metal if you want like a coating on it, like a durable coat, like much more durable than paint. Yeah. So like Walker owns a company that does powder coating like for the steel for awnings.

Right. And so it just makes the steel last longer when it's dipped in powder. But this isn't selling that, right? This is selling the booths and the ovens that they use to apply the powder coating. And I guess to set sarah coating, which I don't. To bake it on, basically. Yeah. Right?

So you'll think you would dip, you would either dip it in powder or dip it in saracote, which I think is the liquid version of powder coating. And then you would bake it in this oven. Yeah. It's like it's, so to me, I'm. picturing like spray tan booth, but like industrial version. And like a giant bat of like that they dip things into and pull things out of. And so, but it's a, so they manufacture those things, which is a great niche.

If I'm thinking about it in a manufacturing sense, the whole positioning of it being e-com is all that's making my brain get a little itchy. And so I just am very curious, right? Because manufacturing historically, at least in my experience, the sales can be hard, right? Because it's kind of, those are relationships that are owned a lot of times by the owner. It's not super clear where to find, depending on how niche the product is, how to find key decision makers of your product. And it sounds like this is, are there sales channels, right, other than website? I think it's e-com.

I think it's, they're just have a website and you can buy a powder coat oven on their website. And so they're, one of the things they said, right, was it social media outbound sales and paid advertising. are still unhouched. And so they're leveraging organic search. So basically they're just, they just are using e-com to manage sales. Like, is it just basically like an online payment system? Or are they...

I'm sure it's a Shopify store. You know, I think it's a Shopify store, and it says they have 80 skews. So you probably just can go on their website, which you find through organic search, and you figure out which model you want, you add to cart, and then you check out and then they mail it to you.

So the idea of this paid, so this is what scares me about these kind of ads and not saying anything that quite I did anything, but using the word of like paid advertising, outbound sales, social media, untouched, like those are all the things that I feel like people are told to look for. Like, oh, it's just a switch I get to turn on

unless suddenly this business is booming without paying attention to whether or not those strategies or strong conversion channels for a type of business that you're buying. And so manufacturing historically, like, how many people, I'm curious, are searching for the 80 skews that they're selling? Like, is that something that happens? Or is it going to be more about maintaining relationships with their current? And, like, how do you find new people that need curing ovens and spray booths? So, I don't know.

I am fascinated at the sales channel. They really didn't describe what it is. They tell you what they're not doing, but they're not telling you exactly what is driving this really tremendous growth. So that's fascinating. I would want to learn exactly what is working here and why. But I'm also a little concerned because what they make and the kinds of clients that they're listing, that they probably have some customer concentrations. You know, that a lot of this growth has come, you know, maybe somebody at SpaceX and, you know, a couple of these other companies found them and went, oh, great, this is easy. We'll order what we need here. And, you know, they probably have some concentration. That's my guess, just based on the type of product. I don't know. I mean, how many do you need, right? Like, if you're, if you're like an industrial, again, I don't know. They do have 80 skews.

But I imagine if you're SpaceX and you're trying to saracote rocket parts coming off a line, you probably don't buy this one. You probably buy an industrial scale one that integrates with your line, et cetera. because this says they also sell the hobbyists, like garage hobbyists. You know, I would think maybe SpaceX has bought a couple of these, you know, for their lab, for their bench top lab, or something like that.

But I wouldn't, I don't read this as we sell big machines to big companies. I read this as similar to like we sell 3D printers online. Like this is probably a $1,000 conversion, maybe a $3,000 conversion. And it's the size of a, a microwave is sort of what I'm picturing here, a large microwave. That's what I'm a bench top type thing.

So do we think that this is one-time's revenue? Like you sell the machine and the customer's gone, or is there some ongoing revenue stream? Because a lot of these businesses, and maybe Chelsea, you know, you've seen more of these than I have for sure. Like a lot of them almost do the Razor Razor-Razer Blade model where they sell the machines at a relatively low margin, but then they kill you on the replacement parts. By the way, all the auto dealers do this too.

I'm learning that, especially when the fan broke in my Subaru. So is that going on here, or do we think it's just a one-and-done kind of situation? I think this is one and done. Here's why I think that. Quietlight is a very competent broker, and if there was a razor-blade model going on here, they would have mentioned it. Because that would have made it much more attractive. So these are durable products that,

You sell once and you've got to, so your marketing channel really matters a lot here then because you don't have reoccurring revenue, really. Correct. And the names that they're naming are impressive, but they're also typically companies with very specific decision making processes, right? So you're talking contracts to get into their supply chain. And so I also, with manufacturing, one of the biggest things you need to check on are if they're standing contracts, right? and if those contracts can transfer upon ownership changes. And so does it tell us what the average order value is? It doesn't say.

I would expect, I mean, I've done some Googling. We don't know what business this is. But there's this one built American equipment, and they've got $3,000 steracote ovens. You know, there's this other one, light armor ovens, and they're $2,000 to $6,000 ovens. kind of depending on the size.

So that's a lot of units that they're selling then at 4.8 million of revenue. I mean, yes and no, Heather. I mean, I'm used to selling $30 pet supplements. I guess since I don't know this product very well, and that's 1,600, you know, units if it's $3,000 per unit a year, I feel like, wow, I didn't know there was, you know, that much demand. And they did say this is a space where new entrants rarely survive. So they made it sound like it is.

kind of a crowded space where it's not that easy to to achieve the kind of success they achieved, but they didn't really tell us what, you know, they didn't give us a hint about their secret sauce. Yeah, and that's kind of the fundamental challenge here. It's like, what's unique other than you're the first manufacturer to figure out how to use a website, right? Like, is this truly, like, is this truly something that you have some sort of mode around it because of IP or scale or design? Like, what is it that? that's giving you these kind of margins these guys have and the belief it's going to stick around.

And I don't see it, but maybe you find out later after you sign the NDA. It says they've been a... It says a decade of customer feedback, and they have the broadest catalog in the space. And so they've... Right, it's like one or two options. You're either a niche provider

and you carry a very few select skews, or you carry all of them, so that people know that they can come to you for whatever. And so they've chosen... this, I can come to them for whatever model. I think I'm just, there's not enough information here for me to understand how, why they've nearly doubled. Like, how are they doubling and is it sustainable?

Or nearly five, it acts technically, right, in the last five years. It's like the, and Heather, you mentioned it, right? Like, we don't actually know what their sales channels are in this company. And so manufacturing historically is not an easy company to buy and they, and get new clients. It's hard to find key decision makers in the types of businesses that make these small purchases, unless you have an end. And it kind of feels like this person has a little bit of an end because those are pretty big names. Yeah, it could be like a very difficult to transfer business, although they are selling on e-commerce. So it is hard to, I'm just confused.

But what there's a clue to me, the multiple seems kind of low for the EBITDA level that we're talking about here. I was surprised. Yeah. And to your point earlier, Bill, yeah, Quiet Light's a good broker. So, you know, they've priced in some risk, I think. That's what it's telling me. Yeah, or it may be grown really fast and so people aren't willing to pay, you know, on the very most recent growth. That could be it. Yeah. Well, and it's, it's a, um, the highest level of peripasoo lending I've ever seen offered. Heather, expand on, expand on kind of what peripsu lending is, what they're talking about here. So this is, they think, going to be $11 million deal. And tell us how the length, kind of the capital back shakes out here for deal like this. Right. So SBA has a

limit of $5 million. Interestingly enough, there's a new program that can go to $10 million for certain manufacturing Nakes codes. So I, I'm, if this broker probably already checked it out and they don't qualify for the, for the $10 million, they can only qualify for the five. So if that's the case, then the SBA maxes out at $5. and then certain banks, and there's only like literally a handful of banks that will do this additional, I'll call it a companion loan. They call it Perry Pesu because that's just how they share the collateral. But the same bank that's doing the $5 million will do this additional stretch piece up to $2.5 million is what they say here. So that combine you're borrowing $7.5 million from the same bank.

It's not two different banks like mezzanine financing. It's the same bank, generally the same terms, 10 years. repayment on the $5 million, 10-year repayment on the two and a half. But the banks that will underwrite that extra piece, they're pretty conservative when they do that. They will look for a tighter resume fit, better personal financial statement, you know, your personal net worth and your liquidity. And they'll just look for the deal to be that much more solid. You know, everything that they look at in the business, they'll just want it to be a little bit more solid and predictable. So, you know, back to my, what I always say about SBA prequalified, it doesn't,

really mean it's pre-qualified. It's good marketing. It says the broker sort of talked to somebody at a bank and said under certain circumstances, but the reality is the bank needs four things to decide. And they've only got one when they are talking to a broker or maybe two. They've got a little bit about the business, usually not enough, a little bit about the deal structure, not enough because there's no structure that's been reached yet. But they don't know anything about the personal resume of the buyer or the personal financial statement of the buyer. So the pre-qualification is pretty flimsy at this point. It just says they've talked to a bank that says, yeah, we might do that under the right circumstances.

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built and scaled franchise businesses. If you are exploring ETA and want to understand whether franchising fits your acquisition strategy, visit Franzy.com. That's F-R-A-N-Z-Y.com. And thanks to them for sponsoring today's episode. So with the Perry Pesu loan, so you get the $5 million SBA loan, you get, is three million in the cap on Perry Pesu typically? It's bank by bank, but yes, right now, the furthest I've seen a bank go is the additional three, so total of eight.

Okay. So, but you have, do you have one loan or you have two loans? Two loans, one, five million standard SBA 7A and a second two and a half or three million dollar conventional loan from the same bank. And how do the terms differ between the two loans? They're the same, they're peri-pissue, same seniority. They're both senior debt, but how are the terms different? Right. So usually they're both going to be a 10-year amortization.

The SBA only lets the bank go with a shorter amortization on their commercial loan. if they've got significant real estate collateral. So when there's not real estate involved, they're going to usually be both 10 years. The bank may charge a higher interest rate on the Perry Pesu piece because that's a riskier piece that doesn't have an SBA guarantee.

But sometimes they'll charge the same rate. So sometimes the terms are very much the same. Personal guarantee goes on both. You know, everything kind of looks pretty close to the same, maybe a little bit different interest rate. And you're making payments on both. They both have 10-year- So every month you have two loan payments.

That's right. Yeah. Okay. So that's different than a seller note because with a seller note, it has to go on full standby a lot of times. And so you end up with a very different structure on your kind of bridge debt. But in this case, it just really feels like another SBA loan. Yeah, exactly. Other than the fact that it's not really, so the bank is going to be more conservative in the way that they look at it.

Right. Okay. I mean, but overall, it sounds like really great. a really great debt package if it makes sense for your deal. If it does, I think the other thing to consider, if you are looking at this deal or any other looking for Perry Pesu, when you're not looking for Perry Pesu, you're going to need $5 million or less.

You have all pretty much 30 plus SBA banks that will, you know, be a contender for your deal. As soon as you ask for Perry Pesu, you're down to really four or five, and all of them being super picky. So your odds of being, you know, looking good to two or three of those, those banks, they go down because it's just, you know, they're going to be pickier and you just don't have that many banks to choose from. So if you need a Perry Pesu loan, would you say it would really be to your benefit to use a broker that knows how to hell do one of these?

Yes, you should. Yeah, and we have closed a lot of them. And one that we closed last month, you know, we got kind of done in record time. But they are not easy deals to do. So we say come early and talk to us pre-L-L-O-I if you can so we can tell you what the odds of, out really getting Perry Pesu financing are, because we can assess those very quickly. So to pencil this one, I'm just going to round some numbers. Let's say they've got two and a half million of EBITDA and they want a $10 million purchase price. And you've got $5 million of SBA, $3 million of Perry Pesou, so you have $8 million of total debt, which means you're bringing $2 million of equity to this thing. Ballpark.

Are they, I assume that the underwriting bank is, looking at just a debt service coverage ratio of all of the debt combined, right? Yes, correct. And I mean, in my rule of thumb, it falls just fine. If you borrowed $8 million, I'm going to knock the SDE of 2.7 down to 2.5, and that's for salary, but that's also for other things that you may not add back, or the bank may not add back. So I'll say it's $2.5 million of adjusted ebada. You're borrowing $8 million. So you're asking to borrow 3.2 times adjusted EBITDA. That's going to get you to a very good debt service ratio. Anytime you're below 3.75 turns of EBITDA in debt, you're going to look pretty good on debt coverage. So this, you know,

that would be a conservative debt coverage. That will look good to a Perry Pesu bank. But everything else is kind of where the mystery is, you know, is what does the growth rate look like? What did the DSCR look like in 24 versus 25? Since this is rapid, growth, that might be a challenge. How good is your buyer resume as a fit for this business? Do you have manufacturing in your background or e-commerce? I doubt very many people have both, to be honest. That will be kind of interesting. But if I wanted to buy this, I could convince you that this was an e-commerce deal and I was well qualified, even though I have not ever bent any metal. Right, right. This would be an interesting one because that, which one is, which qualification

skills are going to be better here, the e-com or the manufacturing. I don't know. You know, that would be interesting. So I got to drop off, but I think that I googled some of the vendors in this space, and one of the things I love is these are not that expensive when these ovens are made,

and they are big and bulky, such as you need a forklift to receive them, which to me screams like, this is going to continue to be made in the USA, because you basically would spend more on shipping this from overseas to the U.S. than you would buying one of these things because they're selling for 5 to 15,000, right? And so this is perfect. A number of these folks are located kind of in America's heartland.

So like, not quite sure which one it is, but man, like cool product in terms of an opportunity for somebody. And you don't have to worry about the Chinese are going to flood the market with this thing because it just doesn't make sense to ship this stuff across the Pacific Ocean. I also have to put up, but I love it, and I'm sending it to do two couple members right now. This is a cool one, and I would say, I would say that what I'm guessing how they're winning is that this owner understands marketing and his competition does not. You know, I think probably you've got a number of people making powder coat, surcoat ovens, and they're metal benders in middle America. This guy, and I think I found which one of. it is. They do very good YouTube marketing. There's a whole bunch of testimonials. There's a whole bunch of

videos inside the factory of how they make the ovens. And stuff like that can go a long way, a long, long way, just content marketing. Especially kind of in a niche. So firearms is definitely a big end market for this, but Sarah Coat on firearms, change the color, and to protect them is definitely a big end market. And it looks like they actually sell or have sold to some kind of brands and the firearms accessories industry as well. So like if you're making firearms accessories, you want them to come saracote a lot of times. Or there's all kinds of, you know,

as many CNC machine shops as there are in America, thousands and thousands, there are powder coat and saracote shops, you know, for aftermarket stuff. Seracote, this connector, this gun barrel, this widget, whatever it might be. So I think they've just done a really good job of marketing, organically, and that's probably what is making this go. Yeah, this is very cool. That's a really

good one to go to the next step on because there's a lot of unanswered questions here that could swing this one way or the other. But I mean, what's been presented here is very solid. Looks good. Yeah, I'm very interested in this. And something coming back to the peripasoo, I think it's important to highlight for people, the periposu loan is not a way to get more turns of leverage. It's not a way to bring less equity to a deal. It's a way to kind of scale up the same ratios that you would normally see in a sub-5 million dollar deal to a $10 million deal. Yeah, well said, exactly. It's not to get higher levered. In fact, if anything, the banks want you to be a little bit lower on the leverage scale when you're borrowing that extra piece. But it lets you go

past the $5 million that we're sort of capped at right now. And of course, we're all hoping someday Congress will give us more than $5 million as a limit on SBA, but it doesn't look like it's happening anytime soon. Yeah. So this is the solution. Yeah. Yeah. So it's, it's your, it doesn't scale up your kind of probably 20% equity that you have to bring, but it lets your 80% debt piece be more than $5 million. Right. Exactly. And I'm surprised this doesn't qualify for the expanded SBA loan limit of $10 million because this looks right over home plate American manufacturing. They limited it to certain industry code. So it's still, this one maybe does have a chance. What I found when lenders look for the industry code on the tax returns, a lot of accountants

that prepare taxes don't use the right code. They just put any old code on there, and it's often inaccurate. So there's a chance maybe there's, you know, you look into this deeper and you find that They really do qualify for that and you just need the seller to go back and refile the tax return with the correct industry code on it. So that's a possibility still. Interesting. So it's based on the most recently filed tax return of the acquired business. That's what most lenders will do. The SOP doesn't exactly say that, but most lenders feel like that's what they want to hang their hat on is something that was actually filed. And if it was filed incorrectly, they'll actually often ask the seller to refile and correct it and do their own assessment. Is this really in one of those manufacturing Nakes codes or industry codes?

So that's usually how they'll approach it. Okay. So you're saying, I mean, classic lender really wants to see the tax return. Always. If it's not on the tax return, it never happened. Right. Pretty much. But you're saying it's not just manufacturing as an industry code.

It's manufacturing of certain things. They limited it to certain, and I don't remember the numbers. They all start with a three, but there are certain sections of, of manufacturing that are qualified for the 10 million and others that are not. So you'd have to look up what those industry codes are and see if that seems like this is really in one of those or not. Okay. Interesting. I really like this. I would say, so I found it.

It is in rural nowhere. I mean, this factory. It is like fly somewhere and drive two hours location. And they're making it. They're manufacturing it there. So I would say if you are going to buy this, I would be pretty nervous about I live in New York City and I'm going to buy this rural manufacturing facility and never be there. Yeah. Oh, no, you can't do that. Yeah. You can't do it. So I would say honestly, like so much about this deal looks really great. I would say that's, this is the big gotcha.

Because it is, it is not easy to get to. It's not close to anything. It's not easy to get to from an airport perspective. And also this is a, it's not like a warehouse out there where they're packing and shipping stuff. Like they're welding stuff and like doing electronic, like this is a real factory. So you do need some manufacturing know-how to be out there. I sense it would be good. It would be great to have some manufacturing know-how, but it would at least be bottom line almost required for you to be physically present, even if you didn't. So I think a thing that's going to limit this buyer pool or should limit this buyer pool is probably GV. graphic proximity. Yeah. And to your point, the lender will never, an SBA lender will never lend even the

$5 million, let alone the Perry Pesou, if you're not quitting your job in New York City or wherever you are and moving here and showing them, you know, rent or that you bought a house here that you are literally going to be there every day. They won't even entertain the discussion. So, sorry, let me press on this a little bit because that was not my, I mean, having bought a lot of e-commerce businesses, right? That has not been my experience with lenders that they're very, very focused on the geography of it. And we also, on this podcast all the time, see, this business is relocatable or, you know, I've never gotten the fifth degree from lenders about my physical proximity to the target. Has that changed? Is that new that lenders are kind of figuring it out,

that a lot of these businesses are not remote operable? Yeah, I think since you got your SBA loans, in those subsequent years, lenders got burned. Lots of different banks got burned on somebody who tried to run something remotely and it failed. And whether that was the ultimate cause or it was something else, lenders got smart really fast and said, we're never doing that again. And so now, yes, absolutely, it's in our questionnaire that we process with all of our new applicants. You have to be within a drivable distance. You have to be living within a drivable distance.

Once in a blue moon, we get an exception. made because someone has extensive experience running businesses and maybe a really good personal net worth. But outside of that, now the banks are going to want you to prove that you live there. Sometimes that includes in your closing list, your checklist of things you have to submit a copy of a lease of a new apartment or house where you're moving. So can I get an apartment there and not move my primary residence? and that might be all right? They don't like it as much, but a lot of people do say,

look, I'm going to live there Monday through Friday pretty much in this apartment, and I've rented it, and I'm going to go home on the weekends. I'm not actually selling my house. Sometimes they'll go for that. It depends, but they are looking for hands-on, physically nearby. About the furthest commute they'll go for is like an hour and a half. So I already live here, but I can drive there. If it's more than an hour and a half, they're not going to go for that in most cases, too.

very interesting and you're not going to be able to hide it either because if you own a house somewhere else you're going to need it as close it as collateral because your sba lander's taking a second mortgage on that house yeah yeah there's no way to hide it yeah you're going to have to prove that you're moving yeah all right well we're going to wrap up this episode of acquisitions anonymous if you like this one we have jeez pushing 500 more uh maybe not just like it because they're all different but in the same vein over at ACQU-Anon.com. That's our website. So head over to ACQUanon.com and get on our email list. We will email you when our new episodes come out if you are not an audio person or you can't always get through all your podcasts, but you want to know about the businesses that we're covering.

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