SBA Loan Calculator

Model your deal structure, plug in your financials, and see the maximum offer price an SBA-backed buyer can support.

Deal Structure
Equity 10%
SBA 70%
Seller 20%
Typical Min SBA %
Debt Terms
Financing Type% of DealRateTerm
Equity Injection
10%

—

—

SBA Loan
70%

%

yrs

Seller Financing
20%

%

yrs

Financial Overview
Year202220232024
Cash Flow Available for Debt Service
$114,088$260,936$699,411
Implied Maximum Offer Price
$358.1K
Average Three-Year Cash Flow
x
Debt Service Coverage Ratio
$286.5K
Maximum Annual Debt Service
Interest RateDebt ServiceTotal
Implied SBA Debt9.8%$201.4K$1.3M
Implied Seller Financing6.0%$85.1K$366.8K
Total Debt$286.5K$1.7M
Equity Injection$183.4K
Maximum Offer Price$1,833,753

How SBA financing works for acquisitions

The SBA 7(a) loan is the most common way small business acquisitions are financed. The buyer puts up 10% equity (at least half in cash), the SBA-backed lender covers up to 90% of the purchase price, and the seller often carries a note for a portion of the balance. Understanding this structure helps both buyers and sellers set realistic expectations.

The capital stack

A typical SBA acquisition has three layers: buyer equity (10% minimum), an SBA 7(a) loan (the largest piece, up to $5 million per loan), and optional seller financing. The SBA guarantees up to 75% of loans over $150K, reducing risk for the lender. As of July 2026, borrowers can hold up to $10 million in combined SBA 7(a) and 504 debt.

Lenders size the loan based on cash flow, not just the asking price. If the business can't service the debt at the required coverage ratio, the maximum offer price drops accordingly.

Debt service coverage ratio (DSCR)

DSCR measures how comfortably a business can cover its debt payments from operating cash flow. A 1.25x ratio means the business generates $1.25 for every $1.00 of debt service. The SBA minimum is 1.10x; most lenders require 1.15–1.25x for a clean deal.

This calculator uses DSCR to work backwards from your financials: given the cash flow, the loan terms, and the required coverage, what is the maximum debt the business can support — and therefore the maximum offer price?

Equity injection

The SBA requires a minimum 10% equity injection on acquisitions. At least half (5%) must be the buyer's own cash — personal savings, retirement funds via a ROBS structure, or other unencumbered assets. The remaining 5% can come from a seller note on full standby for the life of the SBA loan, meaning no payments are made on it until the SBA loan is fully repaid.

Borrowed money (HELOCs, personal loans) does not count toward the equity injection. Funds must be "seasoned" — typically in the buyer's account for at least 3 months.

Seller financing

Beyond the standby note that can count toward equity, sellers can carry additional non-standby financing with regular payment terms. Seller notes typically carry a lower interest rate (5–7%) and shorter term (3–7 years) than the SBA loan. Because seller debt service is cheaper per dollar, shifting more of the capital stack to a seller note can increase the total offer price — a useful lever in negotiations.

Sellers offering financing also signal confidence in the business, which can strengthen the deal for all parties.

Interest rates

SBA 7(a) rates are variable, set as a spread over the WSJ Prime rate (currently 6.75% as of mid-2026). The SBA caps the maximum spread by loan size: Prime + 3.0% for loans over $350K (most acquisitions), Prime + 4.5% for $250–350K, and higher for smaller loans. In practice, most acquisition loans price at Prime + 2.5–3.0%, putting current rates in the 9–10% range. Rates adjust quarterly.

Official SBA resources

This calculator is for educational purposes only and does not constitute financial advice. Actual loan terms vary by lender. See the success fee calculator to estimate broker fees, or get a free valuation to see what your business is worth.

Common questions about SBA loans

An SBA 7(a) loan is a government-backed loan designed to help buyers acquire small businesses. The SBA guarantees up to 75% of loans over $150K (85% for loans of $150K or less), reducing risk for the lender. Maximum loan amount is $5 million per loan, with terms up to 10 years for business acquisitions (25 years if the deal includes real estate). As of July 2026, borrowers can hold up to $10 million in combined 7(a) and 504 debt.
The SBA requires a minimum 10% equity injection from the buyer. At least 5% must be the buyer's own cash (personal savings, retirement funds via ROBS, or other unencumbered assets). The remaining 5% can come from a seller note on full standby for the life of the SBA loan. Borrowed money like HELOCs does not count, and funds must be seasoned (typically 3+ months in your account).
SBA 7(a) rates are variable, based on the WSJ Prime rate plus a spread capped by the SBA. For loans over $350K (most acquisitions), the maximum is Prime + 3.0%. With Prime at 6.75% as of mid-2026, that puts the ceiling around 9.75%. Most acquisition loans price at Prime + 2.5–3.0%. Rates adjust quarterly. Seller notes are negotiated separately, usually at 5–7% fixed.
SBA pre-qualification (or pre-approval) means a lender has reviewed your financial profile and confirmed you are eligible to borrow up to a certain amount. It is not a commitment to lend on a specific deal, but it signals to sellers that you are a serious, financeable buyer. Use the SBA's Lender Match tool to connect with participating lenders.
The debt service coverage ratio (DSCR) is the gatekeeper. The SBA minimum is 1.10x; most lenders require 1.15–1.25x. If the business generates $200K in cash flow and the lender requires 1.25x coverage, maximum annual debt service is $160K — which caps the total debt and therefore the offer price. The calculator above lets you adjust the DSCR to see how it affects the result.
Yes. Seller notes typically have lower interest rates and shorter terms than SBA loans, meaning each dollar of seller financing costs less in annual debt service. Shifting a portion of the capital stack from SBA debt to a seller note frees up room for more total debt, increasing the maximum offer price. Sellers can hold both a standby note (toward equity) and an additional non-standby note with regular payment terms.

Ready to make an offer?

Run the numbers, then meet the owners. Rejigg connects you to off-market businesses matched to your buy box.

Start your searchI'm an owner