Can the Business Afford Its Own Price?

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 (7% as of September 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 8.1, Appendix 15, an initial acquisition must show a ratio of at least 1.25 at any loan size (effective October 1, 2026; the earlier size-based 1.15 / 1.10 floors under SBA’s March 2026 guidance no longer apply to acquisitions) . 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.