Business Acquisition Loan Calculator

How the SBA Acquisition Structure Works

The SBA 7(a) requires a minimum 10% equity injection on business acquisitions. Of that 10%, at least half (5%) must be the buyer's own cash — not borrowed. The remaining 5% can be a seller note on full standby for at least 2 years (no payments to the seller during that period).

Why Seller Notes Help

• Reduces the buyer's cash injection requirement
• Signals seller confidence in the business (lenders weight this heavily)
• Provides an additional safety net for the SBA lender
• Often structured at 6-8% interest, fully amortized over 5-7 years after the 2-year standby

Working Capital is Often Underestimated

New owners often forget to negotiate working capital into the loan request. The first 60-90 days of new ownership typically have lower revenue (operator transition) and higher expenses (transition costs, advertising). Add at least 3 months of operating expenses as working capital to your loan request.

Goodwill Financing

SBA 7(a) finances 100% of goodwill, which is often 60-90% of total purchase price in service businesses. This is the SBA's biggest advantage over conventional bank loans, which typically cap goodwill financing at 25-50%.