SBA Business Acquisition Calculator
Use seller discretionary earnings to estimate a supportable purchase price, required buyer equity, standby seller note, SBA payment, and resulting DSCR.
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Estimate the highest purchase price a business may support based on seller discretionary earnings and a target debt service coverage ratio. The model assumes the seller note is on full standby and receives no payments during the SBA loan term.
Business Cash Flow
Acquisition Structure
Whether a seller note can count toward the required equity injection depends on current SBA rules, the standby terms, and lender approval. Confirm the structure before relying on this estimate.
Maximum Purchase Price
$1,151,641.58
Maximum SBA Loan
$978,895.34
Required Buyer Equity
$115,164.16
Seller Note on Standby
$57,582.08
Monthly SBA Payment
$12,666.67
Resulting DSCR
1.25x
| Cash Flow and Sources | Amount | Calculation |
|---|---|---|
| Cash flow available for debt service | $190,000.00 | SDE less salary, other debt, and capital spending |
| Maximum annual debt service | $152,000.00 | Available cash flow divided by target DSCR |
| SBA loan | $978,895.34 | 85.0% of purchase price |
| Buyer equity | $115,164.16 | 10.0% of purchase price |
| Seller note on standby | $57,582.08 | 5.0% of purchase price |
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Compare SBA 7(a) and 504 payments, program fees, and equity scenarios.
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Send your acquisition calculation to CapitalAx for a financing review based on the business cash flow, purchase structure, and buyer profile.
How the SBA Acquisition Calculator Works
The calculator starts with seller discretionary earnings, then subtracts the buyer's required salary, recurring capital spending, and other annual business debt. It divides the remaining cash flow by the target DSCR to estimate maximum annual debt service, then converts that payment capacity into a supportable SBA loan and purchase price.
Seller Notes and Equity Injection
The model treats the entered seller note as being on full standby with no principal or interest payments during the SBA loan term. A seller note does not automatically count toward the required equity injection. Current SBA requirements, the note terms, buyer contribution, and lender policy determine whether it receives equity credit.
What the Estimate Cannot Determine
A supportable payment does not establish eligibility or value. Lenders also review the quality of the seller's add backs, historical financial statements, tax returns, industry risk, buyer experience, working capital needs, collateral, business valuation, and post closing liquidity. Confirm normalized cash flow and the final sources and uses with the lender before relying on a purchase price.
SBA Acquisition Worked Example
Assume a business produces $500,000 of seller discretionary earnings. After subtracting a $120,000 buyer salary, $20,000 of other annual debt, and $30,000 of recurring capital spending, $330,000 remains before acquisition debt service. At a 1.25x target DSCR, the business supports up to $264,000 of annual acquisition debt service before the loan terms convert that payment into a maximum loan and purchase price.
Choosing Inputs and Reading the Result
Use normalized SDE supported by tax returns and financial statements rather than the seller's asking price presentation. Include a market based buyer salary and recurring capital spending that the business needs to maintain operations. A maximum purchase price is a cash flow limit, not a valuation, eligibility decision, or indication that the lender will accept every seller add back.