In June 2026, we hosted Legal Office Hours on “Overcoming Common Deal Sticking Points,” where we discussed the issues that most frequently arise during SMB acquisitions and how buyers can navigate them effectively. We covered common roadblocks that can delay or jeopardize a transaction, strategies for identifying potential issues early, and practical approaches to resolving disputes and keeping deals on track toward closing.
Question Timestamps
- 39:28: If the seller is your landlord, do you typically see a personal guarantee in the lease if the seller’s the landlord? You do commonly see this with commercial landlords.
- 40:18: The non-compete in California. We’re getting a question about that. What is the length of it?
- 41:39: How do you think about geographic restrictions on a business that may be national, for example, a distributor with customers across the country?
- 42:17: A live LOI here: in my LOI, I have a purchase price that states it was based on certain earnings from 2025 and the trailing 12 months, but in the week since, I’ve learned that the accounting was presented as accrual, while the TTM may have actually been on a cash basis, thereby overstating revenue and earnings. What’s the best approach to talking through this purchase price change?
- 45:17: James David, you said resisting a personal guarantee on a seller note should kind of be your first posture, but that you may have to accept it anyway. I think you said that often people do, and by that, you meant buyers—that buyers often just…
- 46:49: Can you restate the part about structuring the seller note to avoid a personal guarantee and enable refinancing down the line?
- 48:10: What is your opinion on a buyer putting earnest money down with the LOI? Should this be the expectation or the exception?
- 50:23: Have you seen a situation where everything comes back clean? The Q of E and TTM EBIT are as expected, but they show that pro forma EBIT is going to decline significantly. More specifically, someone is under contract for a $1 million EBITDA distributor and has learned that the last few years of the business have benefited from a big capex project, resulting in larger sales than they’re going to have going forward. That project just ended last month. It was a project with one of the business’s customers. So sales are basically going to decline, and they can already see that in the year-to-date period. I’m not sure exactly how or why this ties into diligence findings, but how would you address that?
- 55:40: What were the three elements in the non-compete?
- 56:04: Would you guys just say a little bit more about how you work, the milestone approach, how that’s different, and give us a little more color on that?
- 58:00: Last question from Hina: For the working capital peg, if there’s pushback from the seller on the approach to calculating it based on the end of the month versus the middle of the month, and the numbers differ because the middle of the month has lower working capital, I guess the question is: if it’s tied to the beginning or the middle of the month, and one of those approaches favors the seller versus you, how do you approach that?
If you need further assistance or are in the process of negotiating a letter of intent, contact us at info@barlowwilliams.law and we will be happy to discuss your situation.