Business Acquisition Calculator
Buying a small business with an SBA loan? See the price at an assumed SDE multiple, the down payment and seller note, DSCR, what you take home after the loan payments, and how fast your cash down comes back.
Seller's discretionary earnings per year: profit plus one owner's pay and add-backs. From the seller's books; verify it in diligence.
Assumed price as a multiple of SDE. An assumption, not a valuation. Small-business averages run roughly 2 to 3.5x.
What you'd actually pay a manager to run it, or what you'd earn employed. Brokers often lowball this.
Your cash as a share of the total project cost (price, working capital and closing costs).
Seller financing as a share of the project cost.
An illustrative default, not checked against today's prime plus the SBA maximum spread. Ask your lender.
Cash for the business at closing. Part of the project cost.
Financed legal, closing and SBA guaranty fees. The guaranty fee alone can be about 3.5% of the guaranteed portion. Unfinanced diligence spend (quality of earnings, retainers) is not included.
Yearly reinvestment the business needs to keep running (equipment, upkeep).
Interest on the seller note. On standby it accrues (assumed compounded monthly).
Repayment period when the note is not on standby.
As reported, business acquisitions without real estate get up to 10 years. Real estate can go longer; not modeled here.
Assumed. As reported for SOP 50 10 8.1, acquisitions numbered from October 1, 2026 need 1.25 on historical earnings. Lenders' methods vary.
Assumed. As reported for SOP 50 10 8 and 8.1: 10% of project cost for a change of ownership, with a full-standby seller note counting for at most half.
At an assumed 3.0x SDE you'd pay $1,200,000. After the loans, this deal leaves about $202,453 a year before income tax, $122,453 more than a $80,000 salary, and your $129,000 down comes back in about 1.1 years, before tax.
SDE can fall 19.5% (to $321,934) before DSCR hits the assumed 1.25 minimum.
How the $1,290,000 is paid
Price $1,200,000 + working capital $50,000 + closing costs $40,000.
Equity injection: $193,500 counted against $129,000 required (assumed 10%), meets it. Implied EBITDA multiple (SDE minus a market salary): 3.75x, approximate.
Year one
| Line | Per year |
|---|---|
| Seller's earnings (SDE) | $400,000 |
| Capex | −$20,000 |
| SBA loan payments | −$177,547 |
| Seller note payments | $0 |
| Owner take-home before income tax | $202,453 |
| Market salary (reference) | −$80,000 |
| Above a market salary | $122,453 |
Assumptions
- SDE comes from the seller's books and the multiple is an assumption, not a valuation. An SBA loan now needs a business valuation.
- SBA rules change. The defaults reflect SOP 50 10 8.1 (October 2026) as reported by lenders and law firms: 10% minimum injection with a full-standby seller note counting for at most half, 1.25 minimum DSCR for acquisitions, 10-year term, $5,000,000 maximum. Check them with your lender.
- DSCR here is a conservative basis (after a market salary and capex). Lenders' methods vary.
- The SBA guaranty fee sits in closing costs; whether it is financed depends on the lender.
- Standby seller-note interest is assumed compounded monthly and owed when the SBA loan ends. It is not in the payback.
- Year one only: no growth, no income tax, no amortization schedule.
Deal figures are hypothetical and rest on the seller's reported earnings and the multiple, rates and lender rules you assume. SBA rules change and actual results will vary. Educational estimates, not financial, tax, legal or lending advice.
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