In the world of startups and venture capital, the worst thing you can call a company is “boring.” Boring means slow. Boring means you aren’t disrupting an industry. Boring means you won’t be a unicorn.
But in the world of SME buyouts—where I operate as a lead buyer—"boring" is not an insult. It is the highest form of compliment.
When I look at companies in Poland or Germany, often with an owner who has been running the business for twenty years, I sometimes hear an apology. They say, “Alex, we are just a commercial laundry,” or “We just do facility management for the same ten factories.” They feel their business lacks the excitement of a high-growth tech platform.
What they don’t realize is that for a professional buyer and the banks that finance these deals, “boring” usually translates to “bankable.”
A boring business is one where the revenue doesn't zigzag. It is one where clients pay their bills on time because the service is essential. It is a business that allows everyone—the buyer, the bank, and the co-investors—to sleep at night.
This article explains what we actually mean when we say a deal is “boring and bankable,” and why owners should embrace this label rather than try to hide it behind a fake growth story.
To a buyer, “boring” is shorthand for predictability.
We are looking for businesses that have already survived the survival phase. When I review a potential acquisition, I am looking for specific traits that signal stability rather than explosive potential.
1. Essential, Recurring B2B Services A boring business usually solves a permanent problem. Industrial cleaning, B2B logistics, packaging manufacturing, or IT managed services. These aren't sectors that disappear when the economy slows down. Offices still need to be cleaned; servers still need to be patched; food processors still need packaging.
2. History Over Forecasts In the startup world, you raise money on a forecast. In the SME buyout world, we buy based on history. A boring deal typically has at least 3–5 years of financial history where the EBITDA floor is visible. If a company made €100K three years ago, €500K last year, and projects €2M next year, that is exciting, but it is not boring. It is volatile. A bankable profile is often €400K, €420K, €450K. That flat line is beautiful because it forms a reliable base for debt service.
3. Low Capital Intensity The best boring businesses don't need to reinvent their factories every two years. They are often asset-light or asset-backed but low-Capex. They generate cash flow that can be used to repay the acquisition loan, rather than being sucked back into constant equipment upgrades just to stay competitive.
“Bankable” is a technical term that translates to: Does the historical cash flow of this business comfortably support the debt needed to buy it?
As a buyer, I finance acquisitions using a mix of my own capital and bank debt. This means I have to look at every business through the eyes of a credit committee. When an owner presents a business, they often focus on the equity story (how much it will grow). But I have to start with the credit story (how safe it is).
Here are the specific metrics that make a deal bankable.
The Holy Grail of bankability is the Debt Service Coverage Ratio (DSCR). Simply put, this measures how many times the company’s operating cash flow can pay the annual loan payments.
A risky deal has a DSCR of 1.0x or 1.1x—meaning if profit drops by 10%, the company defaults. A bankable deal typically has a DSCR of 1.3x or higher. This means there is a 30% buffer. If we lose a client or costs rise, the loan is still safe.
Banks in Poland and Germany have specific limits on how much leverage they will put on an SME. Usually, this is in the range of 2.0x to 3.0x EBITDA, depending on the sector. If an owner wants a valuation of 7x EBITDA, but the bank will only lend 2.5x, the gap has to be filled by equity or a vendor loan. A deal becomes "unbankable" when the valuation expectations are so high that the debt required to close the deal would crush the company's cash flow.
This is the most common deal-killer. A business can have great margins, but if 40% of revenue comes from one client, it is rarely bankable. The bank views that single client as a binary risk switch. If that client leaves, the loan cannot be repaid. A "boring" deal has a fragmented customer base where no single client dictates the company's survival.
Here is the paradox: Owners and brokers often try to make a boring business look exciting to justify a higher price. They dress up a standard logistics firm as a "tech-enabled supply chain platform." They present a "Hockey Stick" chart showing that after five years of flat growth, next year will somehow double.
This strategy almost always backfires with professional buyers.
When I see a teaser promising explosive growth, my risk radar goes off. High growth consumes cash (for working capital, hiring, marketing). But in a leveraged buyout, we need cash to service debt.
If you tell a bank, "We will grow 50% next year," the bank hears, "We will have a cash flow crisis next year."
Furthermore, when an owner tries to sell "potential," they are asking to be paid for work that hasn't been done yet. As a buyer, I am paying for what you have built (the boring, stable past), not for what I might build in the future.
When I bring a deal to a financing partner, I have about ten minutes to explain it.
Scenario A (The "Exciting" Deal): "It's a digital marketing agency. Revenue fluctuates wildly month-to-month. They just pivoted to AI services. The founder is the only one who can sell. They predict 100% growth."
The Bank's Reaction: "Pass. Too much key-man risk, cash flow is unpredictable, assets are nonexistent."
Scenario B (The "Boring" Deal): "It's a facade cleaning company. They have 50 recurring contracts with office buildings. Revenue has been stable at €3M for four years. EBITDA is €500K. The operations manager runs the crews, not the owner. They need very little new equipment."
The Bank's Reaction: "Interesting. The cash flow covers the loan with a 1.4x buffer. The collateral is clear. Let's look at the term sheet."
Scenario B is the deal that gets funded. It is the deal that closes. And ultimately, for an owner, a closed deal at a fair price is worth infinitely more than a "potential" high valuation that never clears the credit committee.
It isn't just banks. In my model, I sometimes invite co-investors to participate in larger or niche deals. These are typically sophisticated private investors or family offices.
These investors are not looking for venture capital returns (and the 90% failure rate that comes with them). They are looking for capital preservation and yield.
When I present a "boring" deal to a co-investor, I am speaking the language of trust. I am saying: "This business is understandable. The downside is protected by assets and contracts. The upside comes from operational improvements, not from winning a lottery."
A boring deal offers a clear path to value creation:
Buy a stable asset.
Professionalize the management.
Optimize processes (CRM, ERP, margin improvement).
Pay down the debt using the steady cash flow.
It is not glamorous. It doesn't make for a thrilling dinner party story. But it works.
Finally, there is a human element.
After the deal closes, the owner (usually) exits or steps back, and I step in to oversee the business. If the business is "exciting" (volatile), every month is a stress test. Will we make payroll? Will the bank call the loan?
If the business is "boring" (predictable), we have the mental space to work on long-term strategy. We can focus on better software, better hiring, and slow, sustainable expansion. We aren't fighting fires; we are building a foundation.
For an owner selling their life's work, there is dignity in this. You aren't handing over a chaotic experiment. You are handing over a machine that works. You are selling a business that doesn't need you to survive.
If you are an owner preparing to sell, take a hard look at your business.
Are you trying to polish it into something it isn't? Are you hiding the stability because you think it looks stagnant?
Don't. Lean into the boredom. Show the stability of your contracts. Show the predictability of your margins. Show that your business is a fortress, not a firework.
In the world of SME acquisitions, "boring" is the code word for quality. It is the characteristic that gets the bank on board, gets the buyer to the closing table, and ensures your company thrives long after you have moved on.
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Meta text (≤155 chars): Why boring, predictable SME deals are often the most bankable — and why that makes them more likely to close and survive after acquisition.
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