CBB Marketing & Deal Structuring 2

Question 1

A business broker is preparing a Confidential Business Review (CBR) for a manufacturing company. Which section should appear FIRST to capture buyer interest?

Accepted Answer

Executive summary highlighting key value drivers

Answer

The executive summary is placed first to immediately communicate the business's value proposition and entice buyers to read further.

Question 2

When marketing a business with below-market owner compensation, a broker should present this to buyers as:

Accepted Answer

A discretionary add-back that increases effective EBITDA

Answer

Below-market owner compensation is a legitimate add-back that increases the seller's discretionary earnings (SDE), making the business more attractive to buyers.

Question 3

A seller insists on an all-cash deal at full asking price. The broker's BEST response is to:

Accepted Answer

Explain that all-cash deals often result in a lower sale price and fewer qualified buyers

Answer

All-cash requirements significantly narrow the buyer pool and often result in lower offers, so brokers should educate sellers on the trade-offs.

Question 4

In a deal where the buyer assumes an existing SBA loan, the broker must ensure:

Accepted Answer

SBA approval of the loan assumption before closing

Answer

SBA loan assumptions require lender and SBA approval, which must be obtained prior to closing for the transaction to be valid.

Question 5

Which marketing channel is MOST effective for maintaining confidentiality while reaching qualified buyers for a mid-market business?

Accepted Answer

Blind listings on business-for-sale aggregator websites

Answer

Blind listings omit identifying details, allowing brokers to gauge buyer interest while protecting the seller's confidentiality.

(CBB) Certified Business Brokers Practice Test

(CBB) Certified Business Brokers Practice Test

CBB Marketing & Deal Structuring 2