Client concentration is one of the most common objections buyers and lenders raise during a transaction, especially in the mainstream SMB market.
In this episode of The 7-Minute Takeover, we break down what high and extreme client concentration actually mean, why it can significantly impact valuation and financing, and how buyers can think about de-risking these deals.
We cover:
✔️ Why lenders get nervous when a few clients drive most of the revenue
✔️ What buyers should try to uncover before making an offer
✔️ How price, structure, and liquidity factor into mitigating risk
✔️ Earn-outs: when they help, and when they don't
✔️ What a realistic “Plan B” looks like from a lender’s perspective
The takeaway: you can’t eliminate client concentration risk, but you can understand it early, price it correctly, and structure around it.If you’re serious about buying, this is a risk you want clarity on before LOI.
Want an expert second opinion on a deal or need support on important financial documents? Book a consultation with our advisor team today: https://www.villagewellth.com/book-consultation📌
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