SBA 7(a) Business Acquisition Calculator

Enter the deal and see whether it carries itself. Simply put in the purchase price, what you are bringing in cash, any seller note, and the business's cash flow, and the calculator sizes the 7(a) loan, the payment, the coverage ratio, and what is left for you at the end of the year.

One quick note: pick your cash flow basis carefully. SDE and EBITDA are not the same number, and the gap between them is roughly what it would cost to hire someone to do your job.

Estimates only. A lender underwrites the file, and its credit policy sits on top of SBA's rules.

How the calculator works

It funds the project from three places: your cash, the seller note, and the 7(a) loan. Then it amortizes the loan at the rate and term you pick, adds any other business debt, and divides your operating cash flow by the total. A note on full standby carries no payment, so it never lands in debt service.

Buying a business with a 7(a) loan

How Much Cash Do I Need to Buy a Business?

On a complete change of ownership, SBA requires an injection of at least 10% of total project cost. Not 10% of the purchase price. Total project cost is every cost required to complete the change of ownership, whatever the source, other than amounts funded by a line of credit or a 504 loan.

A full-standby seller note can cover up to half of it, which leaves the buyer finding 5% of total project cost. Our SBA 7(a) down payment calculator works through the other structures, including partner buyouts and partial sales, which use a different test entirely.

Is SDE the Same as the SBA's Cash Flow Number?

No, and this is the single most expensive mistake a buyer makes. SBA defines operating cash flow as EBITDA, then allows justified adjustments for unfunded capital expenditures, non-recurring income, distributions, S-corp tax distributions, rent, and owner's draw.

SDE adds the owner's compensation back in, because it is built to show what a working owner takes home. Run SDE straight into a coverage ratio and you have counted your own salary as money available to pay the bank. Set the basis to SDE here and the salary field comes out before anything else happens, and the ratio stays blank until you fill it in.

What DSCR Does the SBA Require?

1.15 on a Standard 7(a) loan, historical or projected, plus 1:1 on a global basis. On a 7(a) Small loan of $350,000 or less the floor is 1.10, effective March 1, 2026, and complete changes of ownership at that size have to be underwritten on projections that reach 1.10 within one year of funding.

Standard 7(a) allows two years to get there on a projection-based change of ownership. Lenders routinely want more coverage than either floor, and that part is credit policy rather than program rule, so no number for it appears here.

What Counts as Debt Service?

All of it. SBA defines debt service as the future required principal and interest payments on all business debt, including the new loan, and lenders pull a current debt schedule that includes shareholder debt.

So an assumed equipment loan, a merchant advance the seller never mentioned, and an amortizing seller note all belong in the "other annual debt service" field. Leave them out and the ratio is fiction.

Seller financing above the minimum injection does not have to sit on standby. That means it amortizes, and amortizing debt counts. Put its annual payment in the same field.

Does a Standby Seller Note Cost Nothing?

It costs nothing during the 7(a) term, which is not the same thing. Full standby means no payments of principal or interest for the term of the SBA loan, documented on SBA Form 155 or the lender's equivalent.

Interest may still accrue and be added to the standby balance, then amortize once the 7(a) is paid in full. So the note stays out of your DSCR and stays very much in your future.

How Long Can the Loan Run?

That depends on what the money buys. Intangible assets including goodwill, plus working capital and inventory, cap at 10 years. Equipment can reach 15 if the IRS asset class useful life supports it.

Change-of-ownership loans may use a blended maturity, or run up to 25 years when 51% or more of the proceeds go to real estate. The term control here follows that rule rather than warning about it, because a 25-year amortization on a goodwill deal produces a coverage ratio that no lender will honor.

How Big Can the Loan Be?

$5,000,000 for any one 7(a) loan. There is a second ceiling behind it: the total SBA-guaranteed balance to one borrower and its affiliates cannot exceed $3,750,000.

A $5,000,000 loan at a 75% guaranty is exactly $3,750,000 of guaranty, so any SBA debt you already carry reduces what you can borrow now. Since July 4, 2026, a 7(a) balance no longer reduces the 504 maximum, though 504 cannot finance goodwill, so on a goodwill-heavy purchase the 7(a) cap still binds.

Do I Need a Business Valuation?

Yes, on every change of ownership. The lender's file has to include a current business valuation that meets SBA requirements and excludes real estate, and it has to be requested by and prepared for the lender.

A valuation the seller commissioned, or one you commissioned yourself, cannot be used. The cost can be passed to you. Budget for it early.

It also does more than satisfy a file requirement. The valuation is what tells you whether the asking price is supported by the earnings you just underwrote.

When Is an Independent Valuation Required?

Above $250,000, measured a specific way. Take the amount being financed, counting 7(a), 504, seller and any other financing, then subtract the appraised value of real estate and equipment being financed. At $250,000 or less the lender may do its own valuation.

Above that, or where buyer and seller are related, the lender has to get an independent valuation from a qualified source, meaning someone accredited as ASA, CBA, ABV, CVA or BCA who is independent of loan production. Note the test is not measured on goodwill.

Can the Seller Stay On After Closing?

Briefly, and as a consultant. The seller generally may not remain an officer, director, stockholder, or employee. If a transition period is needed, the business may contract with the seller as a consultant for no more than 12 months including extensions.

Earnouts to the seller are prohibited. A rebate to the buyer based on business performance is allowed, which is a different animal in the same paddock.

What if the Numbers Do Not Work?

Move one input at a time and watch which one carries the ratio. More buyer cash shrinks the loan. A longer term lowers the payment, but only if the asset mix supports it. Restructuring part of the price into a full-standby seller note takes that piece out of debt service entirely.

What does not move is the cash flow. If the business cannot cover a market salary and the debt, the price is the problem.

Where Can I Get an Acquisition Quote?

Answer a few questions and we route your deal to SBA lending partners who do acquisition work. Free, and no obligation. Bring the seller's last three years of tax returns and an interim statement and the conversation moves faster.

Rules confirmed against SOP 50 10 8 (effective June 1, 2025), SBA Procedural Notice 5000-876777 (effective March 1, 2026), SBA Policy Notice 5000-879058 (effective July 4, 2026), 13 CFR 120.151 and 13 CFR 120.212 on Jul 30, 2026. Confirm any figure with your lender before you sign.