Free tool
SBA Loan & Affordability Calculator
Whether you are buying or selling, this is the test a lender runs: does the business cover its own purchase, and what is left over afterwards?
The agreed price for the business.
SBA lenders usually want at least 10% of the total project cost.
The part the seller finances. Enter 0 if there is none.
SBA 7(a) rates float with prime — check current pricing.
Ten years is standard for a goodwill-heavy acquisition.
Commonly 5–8%.
Usually 3–7 years, sometimes on standby for the first two.
Annual seller's discretionary earnings before the new owner's pay.
What the buyer needs to draw to live. Lenders insist on a realistic figure.
Total monthly payment
$12,953
Coverage ratio 1.35×
Comfortable — this is the coverage most SBA lenders want to see.
An estimate for planning. Fees, standby terms, working-capital needs and the lender's own underwriting will change the real figures.
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Common questions
What is debt service coverage ratio (DSCR)?
The business's cash flow divided by the annual loan payments. Lenders on SBA 7(a) acquisition loans typically want at least 1.15 to 1.25, and most want the buyer's living costs covered on top.
How much down payment does an SBA 7(a) loan need?
Usually at least 10% of the total project cost. Part of that can often be a seller note on standby, but the lender decides what counts.
What term and rate should I model?
SBA 7(a) acquisition loans commonly run 10 years for goodwill-heavy deals, longer where real estate is involved, at a variable rate tied to prime. Check current pricing with your lender before relying on any figure here.
Why subtract an owner salary from cash flow?
Because the new owner has to live. Lenders test whether the business covers the debt after paying a reasonable wage to whoever runs it.
Does a seller note help me qualify?
Often yes. A seller note reduces the bank loan and signals the seller believes the business will keep performing. On full standby it can count toward the equity injection.