Affordability

How Much Business Can I Afford?

Know your real purchase-price range before you fall in love with a listing. Affordability depends on both your down payment and whether the business can produce enough cash flow to service the debt and pay you.

You may technically be able to finance a $1.5M acquisition, but based on your required income and estimated debt service, you should probably be targeting businesses producing at least a certain amount in normalized cash flow. This calculator shows you both numbers.

Total cash available to invest

Liquid cash you could put toward an acquisition

Cash you refuse to invest (personal reserve)

Savings you will not touch

Estimated working capital needed

Cash the business needs for operations

Estimated interest rate (%)

SBA rates typically 10-12%; verify with a lender

Loan term (years)

SBA 7(a) commonly 10 years; real estate can go to 25

yrs

Minimum annual income you need from the business

What you need to live on