Strong history, real estate included, and a stable industry. This looks like a safe business. Until you run the numbers.
This is a 46-year-old preschool and private school in Tampa, Florida serving students from kindergarten through grade 8. The deal includes 1.94 acres of real estate and over 15,000 square feet of facilities.
On paper, this is exactly what buyers look for in education. Long operating history, full staff in place, and a stable demand profile.
The business itself is not the problem. The price is.
Deal Snapshot
Because the deal includes real estate, SBA allows a longer 25-year loan term. That helps, but not enough to fix the core issue.
Financing Reality Check
Even with favorable loan terms, you are left with only about $64K in annual cash flow after debt.
That is the entire problem. You are putting in a large amount of capital for a relatively small return.
Where This Breaks
At a 9.4x cash flow multiple, this deal is extremely expensive, even when factoring in the real estate.
To make the financing work, you need to bring nearly 24% down, which is far above the typical SBA expectation.
And even after committing that much equity, it takes over a decade just to recover your initial investment.
The business may be stable, but the return profile is weak.
What Stands Out
- Long operating history: Over 46 years in business.
- Real estate included: Nearly 2 acres in a prime Tampa location.
- Stable industry: Education and childcare have low default rates.
- Strong margins: Above industry average.
- Expansion potential: Capacity to grow enrollment significantly.
Potential Risks
- Extreme valuation: 9.4x cash flow is very high.
- High equity requirement: ~24% down to meet DSCR.
- Low post-debt cash flow: Only ~$64K annually.
- Long payback period: Over 11 years to recover equity.
- Limited upside: Most of the value is already priced in.
- Operational complexity: Managing staff, compliance, and enrollment.
BizHub Verdict
This deal scores a 5.4 / 10. Not because the business is weak, but because the price leaves almost no upside.
You are buying a stable operation, but at a level where most of the return is already baked into the purchase price.
This is a good business that has been turned into an average investment.
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