SBA 7(a) deal check
Can the Business Afford Its Own Price?
The question an SBA lender actually answers. Enter the deal — price, down payment, seller note, loan terms — and see the debt-service coverage ratio computed the way SOP 50 10 requires, with every payment on its own line.
The deal
What’s being bought and how the price is being covered. Anything not covered by your cash or a seller note becomes the SBA loan.
The agreed (or asking) price for the business itself.
Cash cushion, inventory top-up, and closing costs rolled into the loan. The SBA guaranty fee is often financed here too. Optional.
SBA rules require an equity injection of at least 10% of total project costs for a complete change of ownership.
The portion the seller finances, paid back over time. Common in Main Street deals. Optional.
The SBA loan
Most 7(a) acquisition loans are variable-rate: Prime plus a lender spread, amortized over 10 years (up to 25 where real estate dominates the loan).
WSJ Prime, 6.75% as of July 2026. Edit if it has moved.
Regulatory max for this loan size: Prime + 6.5%.
10 years is the maximum for a business acquisition without real estate; up to 25 where real property is the bulk of the loan.
The cash flow
A lender starts from the business’s SDE, then subtracts what you must pay yourself — what’s left is what can service debt.
Don’t have it? Work it out line by line — the result carries over.
What you need to draw to live on. SDE assumes the owner works for free — lenders don’t.
Debt-service coverage
Enter at least a purchase price and the business’s SDE — the lender’s coverage math appears here.
Lenders often hold themselves to stricter floors (1.25× is common), average multiple years of cash flow, and adjust for items this check can’t see. Informational only, not professional or lending advice.
Methodology
The check runs the standard underwriting arithmetic for a 7(a) business acquisition. The SBA loan is whatever the total project cost — purchase price plus any financed working capital and closing costs — leaves after your cash injection and any seller note. Its payment is a fully-amortizing monthly payment at the rate you set, quoted as Prime plus a lender spread. Federal regulation caps that spread by loan size ($50,000 or less: +6.5%; $50,001 – $250,000: +6%; $250,001 – $350,000: +4.5%; over $350,000: +3%), and the calculator warns if your rate exceeds the cap for your loan size. Prime (6.75% as of July 2026) is an editable input, not a baked-in constant — when it moves, change it.
Cash flow available for debt service starts from the business’s Seller’s Discretionary Earnings and subtracts the salary you’ll draw — SDE assumes an owner who works for free, and no lender underwrites that. The debt-service coverage ratio is that cash flow divided by the year’s total payments on the SBA loan and seller note. Per SOP 50 10 8, the ratio must be at least 1.15 for loans over $350,000; under the 7(a) Small standard (up to $350,000), at least 1.10 satisfies the repayment-ability test per SBA’s March 2026 guidance. The equity check applies the same SOP’s rule for complete changes of ownership: at least 10% of total project costs injected, with a seller note counting only on full standby and only for up to half the requirement.
Limits
- This is a single-year, single-scenario check. Lenders typically average two to three years of tax-return cash flow, add back the specific items they can verify, and stress-test the rate — a passing number here is a reason to talk to a lender, not a commitment letter.
- The SBA guaranty fee (a percentage of the guaranteed portion, set by fiscal year) and other closing costs are not itemized — include them in the “working capital & costs financed” line if you want them modeled.
- Personal debt obligations, outside income, real-estate appraisals, and collateral coverage all affect approval and are outside this tool’s scope.
- DSCR floors and equity rules cited here are the SOP 50 10 8 program minimums current as of the review date below; individual lenders’ credit policies are routinely stricter.
Sources: SBA 7(a) terms, conditions & eligibility; SBA SOP 50 10 8; SBA Information Notice 5000-877673
Last reviewed: July 2026. This calculator is informational only and is not professional, financial, or lending advice.
Frequently asked questions
What DSCR do SBA lenders require?
SBA's SOP 50 10 8 sets the floor: the debt-service coverage ratio must be at least 1.15 for loans over $350,000, and at least 1.10 under the 7(a) Small standard for loans up to $350,000. Those are minimums to be eligible — many lenders hold themselves to 1.25 or higher as internal credit policy, so treat a deal that barely clears 1.15 as marginal, not approved.
How does a lender calculate the cash flow available for debt service?
For an owner-operated acquisition, the starting point is the business's Seller's Discretionary Earnings — its pre-tax profit with one owner's compensation and discretionary items added back. From that the lender subtracts what the incoming owner will actually need to draw as salary, since SDE assumes the owner works for free. What remains is the cash available to make loan payments, and DSCR is that figure divided by the total annual debt service on the SBA loan plus any seller note.
What interest rate should I assume on an SBA 7(a) acquisition loan?
Most 7(a) acquisition loans are variable-rate, quoted as Prime plus a lender spread. Federal regulation (13 CFR 120.215) caps the spread by loan size: 6.5% for loans $50,000 or less; 6% for loans $50,001 – $250,000; 4.5% for loans $250,001 – $350,000; 3% for loans over $350,000. With Prime at 6.75% (as of July 2026), a typical acquisition loan over $350,000 tops out at 9.75%. Competitive lenders often price below the cap; the calculator lets you set both Prime and the spread.
How much do I have to put down on an SBA business acquisition?
SOP 50 10 8 (effective June 2025) requires an equity injection of at least 10% of total project costs for any complete change of ownership. A seller note can substitute for at most half of that requirement, and only if it's on full standby — no principal or interest payments — for the life of the SBA loan. The rest must be the buyer's own cash or other qualifying funds.
Related tools
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