Glossary
A/E/LS Exit Planning Glossary
The terms that decide what your firm sells for, how the deal is financed, and when you get paid. Each one defined in plain language, with the numbers and deal mechanics that apply to architecture, engineering, and land surveying firms.
Equity Injection
An equity injection is the cash a buyer puts into an SBA-financed business purchase, the down payment the bank requires before it funds the rest of the deal.
Read the full definitionSeller Note
A seller note is a loan from the seller to the buyer for part of the purchase price, documented as a promissory note and repaid over time with interest.
Read the full definitionDSCR (Debt Service Coverage Ratio)
Debt service coverage ratio, or DSCR, measures whether a business generates enough cash flow to cover its loan payments.
Read the full definitionEBITDA Multiple
An EBITDA multiple is the number a buyer applies to a firm's earnings before interest, taxes, depreciation, and amortization to arrive at a purchase price.
Read the full definitionEarn-Out
An earn-out is a portion of the purchase price the seller only collects if the business hits agreed performance targets after closing.
Read the full definitionStep-Up Legacy Plan
The Step-Up Legacy Plan is Allen Business Advisors' structured sale of an architecture, engineering, or land surveying firm to its key employees, funded with SBA bank financing.
Read the full definitionESOP (Employee Stock Ownership Plan)
An ESOP, or employee stock ownership plan, is a qualified retirement plan that holds company stock in a trust on behalf of employees.
Read the full definitionSBA 7(a) Loan
The SBA 7(a) loan is the U.S.
Read the full definitionBacklog
Backlog is the dollar value of signed contracts a firm has not yet performed, the work already sold but not yet billed.
Read the full definitionClient Concentration
Client concentration is the share of a firm's revenue that comes from its largest client or a small group of clients.
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Beyond Definitions
See what these terms add up to for your firm
Definitions tell you how deals work. A confidential consultation tells you what your firm is worth, what your employees can finance, and what you would collect at closing.