Financing & Capital
SBA Financing Made Simple
Model your deal, calculate DSCR, and understand your financing options before you submit an offer.
SBA Deal Calculator
Enter your deal details to model loan payments, DSCR, and total cash required at close.
Debt Service Coverage Ratio
1.95
SBA requires a minimum DSCR of 1.25 to qualify for financing.
Loan Metrics
Loan Amount
$1,800,000
Monthly Payment
$21,366
Annual Debt Service
$256,396
Loan Term
10 years
Cash Required at Close
At $2.0M asking price with 10% down and 7.5% interest rate over 10 years, your estimated monthly payment is $21,366 and DSCR is 1.95 — this deal qualifies for SBA financing.
Your Financing Options
Choose the right financing structure for your deal size, buyer profile, and business type.
SBA 7(a) Loan
Up to $5M · 10–25 year terms · As low as 10% down
The workhorse of small business acquisition financing. Available for most business types with DSCR >= 1.25.
Requirements
- 10% down payment
- Good personal credit
- Business cash flow documentation
- 2-year financial history
Ideal for
First-time buyers, businesses under $5M, owner-operators
SBA 504 Loan
For real estate + equipment · Up to $5.5M · Fixed rate portion
Best when the business includes real estate or significant equipment. Split structure with a Certified Development Company.
Requirements
- Same as 7(a)
- Real estate or equipment component required
- Owner-occupied property preferred
Ideal for
Acquisitions including commercial real estate
Conventional Acquisition Loan
Up to $10M+ · 5–7 year terms · 20–30% down
For larger deals or buyers with strong balance sheets. Faster approval and less documentation than SBA.
Requirements
- 20–30% down payment
- Strong personal financial statement
- Credit score 700+
Ideal for
PE buyers, serial acquirers, larger transactions
Seller Financing
Flexible terms · Typically 5–10% of purchase
When part of the purchase price is financed by the seller. Reduces bank debt and signals seller confidence.
Requirements
- Negotiated directly with seller
- Common in 10–20% range
- Usually subordinate to SBA lien
Ideal for
Bridging gaps, reducing down payment, deals that do not qualify for full SBA
Understanding DSCR
The Debt Service Coverage Ratio is the primary metric SBA lenders use to evaluate deal eligibility.
Formula
DSCR = Annual SDE / Annual Debt Service
SDE = Seller Discretionary Earnings (net profit + owner salary + addbacks)
| DSCR | Rating | SBA Status |
|---|---|---|
| > 1.35 | Strong | Easily approvable |
| 1.25–1.35 | Good | Standard approval |
| 1.10–1.25 | Marginal | Requires compensating factors |
| < 1.10 | Below Threshold | Does not qualify |
Use this calculator on any deal in the Marketplace.
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