| Entity | Available Income | Senior DSCR | All-In DSCR | Apex Band |
|---|---|---|---|---|
| Entity 1 — Site Planning & Survey | $263,339 | 2.53x | 2.19x | GREEN |
| Entity 2 — Tower Installation | $400,000 | 3.06x | 2.40x | GREEN |
| Entity 3 — Civil Infrastructure | $4,425,000 | 3.20x | 2.67x | GREEN |
| PORTFOLIO | $5,088,339 | 3.15x | 2.62x | GREEN |
APEX GLOBAL BUSINESS PARTNERS, LLC | Indicative Capital Stack — Supplemental Report
Monroe, WA | deals@apexglobalbusinesspartners.com
August 4, 2026 · Prepared for: Client (name redacted)
RE: Three-Entity Telecom Infrastructure Roll-Up | Indicative Capital Stack
CONDITIONAL GREEN LIGHT. This supplement carries and reaffirms the established verdict from the completed underwriting opinion — subject to three named entity-level cure conditions before binding commitment on any individual entity and before combined capital-stack deployment (see CS-7). All modeling is conditioned on resolution of the outstanding due-diligence flags, most critically independent tax-return verification of Entity 3's revenue and SDE trajectory. Figures are indicative, not commitment-grade.
RATE SOURCING: All rates are indicative market pricing as of the report date; actual pricing subject to lender underwriting, borrower credit profile, collateral position, and deal-specific negotiation. WSJ Prime assumed 6.75%. SBA 7(a) variable range Prime + 2.25% to Prime + 3.00%. Conventional commercial acquisition 7.00%–10.00% APR. SBA 504 CDC 6.17%–6.20%.
The recommended stack is structured across three independent financing mandates, sequenced per CS-6 and consistent with the SBA affiliation-rule constraints. Price targets applied: Entity 1 $835,000 (at ask); Entity 2 business $1,400,000 (negotiated from $1,800,000); Entity 3 $14,000,000 (negotiated from $16,000,000). Combined acquisition (business only, Entity 2 RE excluded): $16,235,000.
| Tranche | Source | Amount | % of Total | Rate (illus.) | Term | Priority | Annual DS |
|---|---|---|---|---|---|---|---|
| E1 — Senior | SBA 7(a) | $668,000 | 4.1% | ~9.50% var. | 10 yr | 1st | ~$104,000 |
| E1 — Sub | Seller Carry | $83,500 | 0.5% | 5.50% fixed | 7 yr | 2nd | ~$16,200 |
| E1 — Equity | Buyer Cash | $83,500 | 0.5% | — | — | Equity | — |
| E2 — Senior | SBA 7(a) | $840,000 | 5.2% | ~9.50% var. | 10 yr | 1st | ~$130,700 |
| E2 — Sub | Seller Carry | $280,000 | 1.7% | 5.50% fixed | 10 yr | 2nd | ~$36,300 |
| E2 — Equity | Buyer Cash | $280,000 | 1.7% | — | — | Equity | — |
| E3 — Senior | Conventional Bank | $9,800,000 | 60.4% | 7.25% fx/fl | 10 yr | 1st | ~$1,382,000 |
| E3 — Sub | Seller Carry / SBIC Mezz | $2,100,000 | 12.9% | 5.5%–6.5% (seller) / 12%–16% (SBIC) | 10 yr | 2nd | ~$273,000–$338,000 |
| E3 — Equity | Buyer Cash | $2,100,000 | 12.9% | — | — | Equity | — |
| Total | $16,235,000 | 100% | ~$1,942,200–$2,007,200 |
| Component | Amount | Weight | Rate | Weighted Cost |
|---|---|---|---|---|
| SBA 7(a) Debt (E1 + E2) | $1,508,000 | 9.3% | 9.50% | 0.88% |
| Conventional Senior (E3) | $9,800,000 | 60.4% | 7.25% | 4.38% |
| Seller Carry / Sub Debt (all) | $2,463,500 | 15.2% | 5.50% | 0.84% |
| Buyer Equity (all) | $2,463,500 | 15.2% | — (target IRR) | — |
| Total / Blended Cost of Debt | $16,235,000 | 100% | ~6.10% |
| Component | Amount |
|---|---|
| Entity 1 / 2 / 3 equity (business-only total) | $2,463,500 |
| SBA guarantee fees (E1 + E2, est.) | ~$28,000–$55,000 |
| Closing costs / legal / DD (all entities, est.) | ~$150,000–$250,000 |
| Working capital reserve (recommended) | ~$250,000–$500,000 |
| All-In Cash Requirement (estimated range) | ~$2,941,500–$3,273,500 |
Base SDE $5,088,339 combined (E1 $263,339 | E2 $400,000 | E3 $4,425,000). 4.0% base growth. E1/E2 seller notes on 24-month interest-only standby per SBA lender requirement; E3 seller note amortizing from Day 1. No management fees, platform overhead, or integration costs modeled below — these are real cash demands the buyer's team must add once post-close structure is defined.
| Year | Combined SDE (4% growth) | Senior DS (SBA + Conv.) | Sub DS (seller carry) | Total DS | Net Cash to Equity | Platform DSCR |
|---|---|---|---|---|---|---|
| 1 | $5,088,339 | ~$1,616,700 | ~$273,000 | ~$1,889,700 | ~$3,198,639 | 2.69x ✓ |
| 2 | $5,291,873 | ~$1,616,700 | ~$273,000 | ~$1,889,700 | ~$3,402,173 | 2.80x ✓ |
| 3 | $5,503,548 | ~$1,616,700 | ~$325,500 | ~$1,942,200 | ~$3,561,348 | 2.83x ✓ |
| 4 | $5,723,690 | ~$1,616,700 | ~$325,500 | ~$1,942,200 | ~$3,781,490 | 2.95x ✓ |
| 5 | $5,952,637 | ~$1,616,700 | ~$325,500 | ~$1,942,200 | ~$4,010,437 | 3.06x ✓ |
All five years clear the 1.75x floor and the 1.83x target at base SDE. DSCR improves annually as revenue grows and debt amortizes.
| Year | Combined SDE (2% growth) | Total DS | Net Cash to Equity | Platform DSCR |
|---|---|---|---|---|
| 1 | $3,603,448 | ~$1,889,700 | ~$1,713,748 | 1.91x ✓ |
| 3 | $3,749,027 | ~$1,942,200 | ~$1,806,827 | 1.93x ✓ |
| 5 | $3,900,488 | ~$1,942,200 | ~$1,958,288 | 2.01x ✓ |
The conservative case clears floor and target in all five years under the recommended negotiated price structure. This is the critical structural achievement the Entity 3 price negotiation to $14,000,000 is designed to deliver — at the full $16,000,000 ask, the conservative Year 1 DSCR would be ~1.63x, below both thresholds.
Equity basis $2,463,500 (buyer down payment). All figures indicative and premised entirely on verified SDE; they compress in direct proportion if Entity 3's SDE corrects downward on tax-return review. Exit multiple 5.0x–6.0x EBITDA (strategic) / 4.5x–5.5x (PE).
| Year | Net Cash to Equity (Base) | CoC Return (Base) | Net Cash (Optimistic) | CoC (Optimistic) |
|---|---|---|---|---|
| 1 | ~$2,533,505 | 101.3% | ~$3,024,839 | 121.0% |
| 3 | ~$2,399,441 | 96.0% | ~$3,136,167 | 125.4% |
| 5 | ~$2,789,720 | 111.6% | ~$3,818,386 | 152.7% |
Cash-on-cash of this magnitude is characteristic of SBA-leveraged acquisitions with seller carry — the equity check is small relative to the earning power acquired. At the conservative SDE, Year 1 cash-on-cash is ~69.6% — still a strong return.
| Hold / Scenario | Exit SDE | Multiple | Net Equity Value | Equity Multiple | IRR (approx.) |
|---|---|---|---|---|---|
| 5-yr Conservative | $3,900,488 | 4.5x | ~$7,352,196 | 2.98x | ~24.5% |
| 5-yr Base | $5,952,637 | 5.0x | ~$19,563,185 | 7.94x | ~51.5% |
| 5-yr Optimistic | $7,987,843 | 6.0x | ~$37,727,058 | 15.32x | ~73.0% |
| 10-yr Conservative | $4,308,235 | 4.5x | ~$15,637,058 | 6.35x | ~20.3% |
| 10-yr Base | $7,236,898 | 5.0x | ~$32,434,490 | 13.16x | ~29.7% |
| Scenario | Equity Invested | Annual Net Cash (Yr 1) | Payback Period |
|---|---|---|---|
| Conservative | $2,463,500 | ~$1,713,748 | ~17.2 months |
| Base | $2,463,500 | ~$3,198,639 | ~9.2 months |
All return figures are premised on seller-stated, unverified SDE. They represent the return profile available if the three named cure conditions are met and verified financials support the stated figures. They are not projected returns and do not constitute a representation of expected performance.
The primary recommended stack (SBA 7(a) for Entities 1 and 2; conventional bank + seller carry for Entity 3) does not require private or bridge capital. A private / mezzanine position becomes relevant only if (a) the Entity 3 seller declines meaningful carry and no SBIC can close on the required timeline, (b) buyer equity is insufficient to fund the combined requirement at a simultaneous close, or (c) the senior lender requires seasoning of verified financials. The following is formatted for that contingency.
| Term | Detail |
|---|---|
| Instrument | Subordinated term loan / mezzanine note |
| Amount Requested | $2,100,000 |
| Position | Second lien, subordinated to $9,800,000 conventional senior facility |
| Collateral | Second lien on all business assets, FF&E, and intangibles of Entity 3; personal guarantee of buyer |
| Proposed Rate | 10.00%–13.00% fixed; negotiable based on term and warrant / equity-kicker structure |
| Term | 5–7 years; interest-only Year 1 optional |
| Exit Source | Refinance into conventional second lien by Year 3, or repaid from operating cash flow (DSCR at base SDE supports full repayment in <36 months of net cash after senior debt) |
| DSCR (senior only) | Base: 3.20x at Entity 3 alone |
| DSCR (senior + mezz) | Base: 2.68x–2.80x |
| Why It Works for the Lender | Entity 3's SDE provides 2.68x–2.80x coverage of combined debt service including the mezz layer; ~$6,000,000 FF&E provides a hard-asset recovery floor; the $25M+ contracted backlog substantially de-risks near-term revenue. Buyer should pursue seller carry first (lower cost); this instrument is the fallback. |
The recommended capital structure does not require the buyer to raise equity from outside co-investors. Total buyer cash (~$2,463,500 business only; ~$3,100,000 all-in) is presumed to come from the buyer's personal capital, a retirement-account rollover (ROBS, if applicable), or a combination. No Regulation D offering is required or triggered by the recommended capital structure.
Conditional Reg D trigger: if the buyer elects to source any portion of the equity — or any co-investment — from third-party investors, the resulting raise will constitute a securities offering subject to federal registration under the Securities Act of 1933 unless conducted pursuant to a valid exemption.
| Condition | Analysis |
|---|---|
| Applicable Exemption | Regulation D, Rule 506(b) or Rule 506(c) |
| 506(b) — Private Placement | Up to 35 non-accredited but sophisticated investors; no general solicitation; disclosure document required for non-accredited participants |
| 506(c) — General Solicitation | All investors must be verified accredited; general solicitation (advertising, online marketing, public deal decks) permitted |
| Accredited Investor Standard | Net worth > $1,000,000 (excluding primary residence) OR income > $200,000 individual / $300,000 joint in each of the two most recent years; or qualifying professional credentials |
| Form D Filing | Filed with the SEC within 15 calendar days of first sale; state Blue Sky notice filings may also be required |
| Required Action | Engage qualified securities counsel before soliciting any co-investor, distributing any investment materials, or accepting any third-party capital. This is a legal requirement, not a financing preference. |
The primary stack is viable at the recommended negotiated prices (platform DSCR 2.69x base / 1.91x conservative Year 1). The alternatives below address the two most likely assembly failures: seller carry unavailability at Entity 3, and an SBA eligibility challenge under the affiliation rules.
Trigger: Entity 3 seller declines meaningful carry, or seller-carry terms exceed 8.00% (at which point SBIC may be competitive). SBIC provides $2,100,000 mezzanine at 12%–16% effective behind the $9,800,000 conventional senior. E3 DSCR: 1.83x–1.92x conservative / 2.58x–2.71x base. Platform DSCR with SBIC replacing seller carry: ~2.55x–2.65x base, ~1.79x conservative (mid-range). The critical difference is cost — SBIC is 6.5%–10.5% more expensive annually than seller carry; recommended only if seller carry cannot be secured at sub-8.00%. Approach a minimum of three SBIC funds in parallel with the seller-carry negotiation.
Trigger: both seller carry and SBIC unavailable, or the buyer elects a clean first-lien-only close.
| Entity | Acq. Price | Equity (30%) | Senior Debt (70%) | Rate | Annual DS |
|---|---|---|---|---|---|
| Entity 1 | $835,000 | $250,500 | $584,500 | 9.50% SBA / 10 yr | ~$91,000 |
| Entity 2 | $1,400,000 | $420,000 | $980,000 | 9.50% SBA / 10 yr | ~$152,700 |
| Entity 3 | $14,000,000 | $4,200,000 | $9,800,000 | 7.25% conv. / 10 yr | ~$1,382,000 |
| Total | $16,235,000 | $4,870,500 | $11,364,500 | ~$1,625,700 |
Platform DSCR: 2.22x conservative / 3.13x base — the cleanest DSCR in any structure. Trade-off: buyer cash rises from $2,463,500 to $4,870,500 (+~$2,407,000). Appropriate if the buyer has the capital and prefers simplicity over leverage optimization; not the recommended primary because the higher equity compresses IRR without improving operational outcomes. This 2.22x conservative DSCR confirms the deal is structurally sound even at maximum simplicity — there is no scenario under the recommended price targets in which the portfolio fails DSCR floor under a reasonable conventional structure.
An earn-in / BIMBO (Buy-In Management Buyout) path is assessed for completeness. None of the conditions that would require it apply at the recommended prices — the deal clears DSCR floor across all three entities under at least two distinct structures. The BIMBO/earn-in path is a viable fallback only if Entity 2's verified SDE falls dramatically below $255,000 and buyer and seller cannot agree to a price commensurate with verified earnings, in which case the buyer could pursue an earn-in on Entity 2 specifically while proceeding with conventional purchases of Entities 1 and 3. This is the named fallback, not the recommended path.
⚠ CONDITIONAL GREEN LIGHT — carried forward without modification from the completed underwriting opinion.
The roll-up is financeable as a combined platform under the recommended capital structure — platform DSCR 2.69x base / 1.91x conservative Year 1, clearing both the 1.75x floor and 1.83x target. Cash-on-cash exceeds 100% in Year 1 at base; the 5-year equity multiple at base is ~7.94x on invested equity of $2,463,500. The structural architecture is sound and the pricing, at negotiated targets, is defensible. The deal is not financeable as currently listed — Entity 3 at $16,000,000 produces a conservative DSCR of ~1.63x (below floor) and Entity 2 at $1,800,000 asks 4.5x unverified SDE. The conditional nature of the green light is load-bearing, not a formality.
Condition A — Entity 2 Financial Verification: full tax-return and bank-statement verification, and independent confirmation that 2024 revenues recovered following the 2023 decline. The $1,400,000 target price is conditioned on verified SDE of at least $350,000; a lower figure requires further renegotiation or removal from the platform close.
Condition B — Entity 3 SDE Verification: confirmation of the stated $4,425,000 SDE via filed tax returns and third-party CPA-reviewed financials. The entire Entity 3 structure — the $14,000,000 price, $9,800,000 senior debt, and CS-3 return profile — is premised on this figure. If verified SDE normalizes below $3,143,702 (the conservative threshold), the capital structure must be rebuilt from the verified figure.
Condition C — SBA Affiliation Rule Resolution: resolved by either (i) written confirmation that the combined enterprise qualifies under applicable NAICS size standards for simultaneous SBA loans on Entities 1 and 2, or (ii) adopting the sequenced close (Entity 3 conventional first; Entities 1 and 2 SBA second) which eliminates the affiliation risk entirely.
Single most important variable: Entity 3 SDE verification. Entity 3 represents 87% of the combined portfolio asking price and 86.9% of combined stated SDE. A 20% reduction in verified SDE compresses all metrics but keeps the deal above floor; a 30% reduction brings the conservative case to the floor boundary; a 40% reduction renders the stack non-viable without a renegotiated price. Do not commit capital to Entity 3 without tax-return-verified SDE.
The established verdict is CONDITIONAL GREEN LIGHT. LOI-ready terms are issued below as a negotiation framework structured for the buyer's direct use. These apply the recommended capital structure, the negotiated price targets required to clear DSCR floor, and convert each named cure condition into an explicit LOI contingency with trigger and remedy.
| Entity | Offer Price | Anchor Logic |
|---|---|---|
| Entity 1 — Survey Firm | $835,000 | At ask; ask is at/below base formula (3.17x stated SDE vs. 3.5x–4.5x range); no reduction warranted |
| Entity 2 — Tower (business) | $1,400,000 | Negotiated from $1,800,000; aligned with base formula (3.5x stated SDE); current ask is 4.5x unverified SDE — above the defensible ceiling given data gaps and 2023 decline |
| Entity 2 — Real Estate (optional) | $1,200,000–$1,400,000 | Contingent on MAI appraisal; offer at $1,200,000 with upward adjustment only upon appraisal confirming value at/above ask |
| Entity 3 — Civil Contractor | $14,000,000 | Negotiated from $16,000,000; required to bring conservative DSCR above 1.75x; represents 3.16x stated SDE — within the 4.0x–4.5x Apex range on verified SDE and consistent with the seller's own public 2.7x framing; a 12.5% reduction is within the seller's stated negotiating posture |
Combined offer (business only, Entity 2 RE excluded): $16,235,000. With Entity 2 RE at negotiated price: $17,435,000–$17,635,000.
1 — Financing (standard): written commitments for each senior tranche within 45 days of executed LOI; deposit returned in full if not obtained. 2 — Due Diligence / Financial Verification (standard): receipt and satisfactory review of ≥3 years of tax returns, 24 months of bank statements, and complete P&L per entity within 30 days. 3 — Entity 2 SDE Verification (Cure A): $1,400,000 conditioned on verified SDE ≥ $350,000; if below, buyer may renegotiate to 3.5x verified SDE (floor $750,000) or terminate Entity 2 without affecting Entities 1 and 3. 4 — Entity 3 SDE Verification (Cure B): $14,000,000 conditioned on filed returns and CPA-reviewed financials confirming SDE ≥ $3,800,000; if below $3,000,000 buyer may terminate with deposit returned. 5 — Contractor License Transfer / Qualified RME (Entity 3): confirmation the Class A & B license is maintainable post-close (buyer qualifies as RMO within 90 days, or RME agreement acceptable to the licensing board). 6 — Contract / MSA Assignment (Entity 1): written confirmation that MSAs and active subcontracts transfer without material modification. 7 — Entity 2 Operational Licensing Confirmation. 8 — SBA Affiliation Rule Confirmation (Cure C): written size-standard confirmation or adoption of the sequenced close before any SBA application. 9 — Clean Title and Lien Search (standard). 10 — Entity 2 Real Estate MAI Appraisal (if RE included).
| Item | Term |
|---|---|
| Exclusivity period requested | 60 days from fully executed LOI (all three entities) |
| Financial document delivery deadline | 30 days from LOI execution (all three simultaneously) |
| SBA / conventional lender term sheet | 45 days from LOI execution |
| SBA affiliation opinion from legal counsel | 21 days from LOI execution (precondition to SBA application) |
| Target close — Entity 3 (conventional, first in sequence) | 75–90 days from LOI execution |
| Target close — Entities 1 & 2 (SBA, second) | 30–45 days after Entity 3 close |
| Full platform close (all three) | 120–135 days from LOI execution |
Before LOI submission: confirm liquidity for the combined equity requirement (~$2,463,500 business only; all-in ~$2,941,500–$3,273,500); engage an SBA Preferred Lender for Entities 1 and 2 and a conventional bank for Entity 3 and obtain preliminary indications of interest. Inside the LOI as closing conditions: tax-return and bank-statement verification (Contingencies 2–4); SBA affiliation legal opinion and close-sequencing election (Contingency 8); license transfer and contract-assignment confirmations (Contingencies 5–7); MAI appraisal for Entity 2 real estate if pursued (Contingency 10).
These deal terms are a negotiation framework for the buyer's own LOI template — not a binding offer, a drafted letter of intent, or legal advice. Engage qualified M&A counsel before submitting any LOI.