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SBA Business Acquisition Loan Calculator: How Much Business Can You Afford?
HIGHEST PRICE YOU CAN FINANCE
$5,894,737
Limited by the SBA $5M loan cap
- SBA loan
- $5,000,000
- Seller note (standby)
- $294,737
- Annual debt service
- $809,610
- DSCR at that price
- 1.66x
- Price ÷ EBITDA
- 4.14x
- Max price under the 10% equity injection$12,000,000
- Max price under the 1.25x DSCR$7,602,213
- Max price under the SBA $5M loan cap$5,894,737
At $3M or more, SOP 50 10 8.1 has the lender order a quality of earnings report, and coverage is tested on its earnings. Budget for it.
Assumes a first-time acquisition under SBA SOP 50 10 8.1: a 10% equity injection, of which a full-standby seller note can cover up to half, and a 1.25x DSCR on historical cash flow. Ignores closing costs and working capital, which add to the project cost. Runs in your browser; nothing is sent or stored.
The three limits on an SBA acquisition
- The equity injection. SBA SOP 50 10 8.1, in effect for loans numbered on or after October 1, 2026, requires at least 10% of the project cost on a first-time acquisition. A seller note on full standby for the life of the loan can cover up to half. If you have $250,000, the most you can buy is $2.5 million with no seller note, or $5 million with a 5% standby note.
- Debt service coverage. The business's historical cash flow must cover all loan payments at least 1.25 times. This is the limit that usually binds, and it is the one the SBA DSCR calculator tests on a specific deal.
- The loan cap. A 7(a) loan tops out at $5 million. Bigger deals need more equity, a larger seller note or debt alongside the SBA loan.
Worked example
A business with $700,000 of adjusted EBITDA and $50,000 of maintenance capex, financed at 10.5% over 10 years:
| Your cash | Standby seller note | Max price | What limits it |
|---|---|---|---|
| $250,000 | None | $2,500,000 | 10% equity injection |
| $150,000 | 5% of price | $3,000,000 | 10% equity injection |
| $250,000 | 5% of price | $3,643,603 | 1.25x DSCR |
A standby seller note does more for your buying power than almost anything else, because it halves the cash the SBA needs from you. Once you have enough cash, cash flow takes over as the limit, and the only way past it is a lower price or more earnings.
Garbage in, garbage out: use the lender's EBITDA
The answer is only as good as the EBITDA you type in. A broker's adjusted EBITDA is usually higher than what an SBA lender will underwrite, and at a 1.25x coverage test every $100,000 of earnings that does not survive underwriting takes about $500,000 off the price you can finance. Rebuild the figure from the seller's tax return first: see what it means when the P&L doesn't match the tax return and which add-backs a lender will accept.
Frequently asked questions
How much do I need to put down to buy a business with an SBA loan?
For a first-time acquisition under SBA SOP 50 10 8.1, the equity injection is at least 10% of the total project cost. A seller note on full standby for the life of the SBA loan can cover up to half of that, so your own cash can be as little as 5% of the project.
How big a business can I buy with an SBA 7(a) loan?
The 7(a) loan itself is capped at $5 million, so with a 10% injection the practical ceiling is a purchase price a little above $5.5 million. In practice cash flow usually sets a lower limit first: the business has to cover its loan payments at least 1.25 times on historical results.
What multiple of EBITDA can an SBA loan support?
At a 10.5% rate over 10 years, a 1.25x DSCR caps the loan at roughly 4.9 times the cash flow available for debt. Add the equity injection and a standby seller note and most SBA-financed deals land between 3 and 5 times adjusted EBITDA.
Does a seller note count as part of my down payment?
Only if it is on full standby, meaning no principal or interest payments, for the entire life of the SBA loan, and only up to half of the required injection. A seller note that pays current interest does not count as equity.
Can I use projections to qualify?
No. Under SOP 50 10 8.1 the coverage test for a first-time acquisition uses historical cash flow, the last fiscal year or a two-year average. Projections can support the story but cannot meet the test.
Is this a loan approval?
No. It shows the price range worth taking to a lender. Your lender applies current SBA rules, its own credit policy and the quality of earnings figures before deciding.