Job 2 of 5
Finance a deal. Can the deal carry the debt?
SBA and bank loans, seller notes and the capital stack, with DSCR tested.
Tools for this job
Start with the numbers
Deal Analyzer
Valuation, financing and DSCR in one view: can this business carry this deal?
Open tool →NEWSBA Loan Payment Calculator
Monthly payment, amortization and the largest loan your cash flow supports.
Open tool →Acquisition Financing Calculator
Senior debt plus seller note: DSCR and post-debt cash flow.
Open tool →Seller Financing Calculator
Seller-note payments, balloon and total interest, charted.
Open tool →Guides
Everything we have on finance a deal
In-depth, practical and written to our editorial standards
Business Acquisition Financing: How to Pay for a Business
Business acquisition financing explained: buyer equity, SBA 7(a) loans, bank debt, seller notes, earnouts and investors, and how much debt a deal carries.
Read the guide →Finance a deal · 8 min readSeller Financing: How Seller Notes Work When Buying a Business
How seller financing works when buying or selling a business: seller note terms, interest, balloons, standby, security, and pros and cons for both sides.
Read the guide →Finance a deal · 4 min readNon-Dilutive Capital: How to Fund a Business Without Giving Up Equity
Non-dilutive capital explained: revenue-based financing, term loans, SBA loans, lines of credit, grants and customer prepayments, with pros and cons.
Read the guide →Compare your options
Which financing fits your deal?
Most small-business purchases use more than one layer. Start with the layer that fits, then test the whole stack in the Deal Analyzer
| Option | Typically fits | What to watch | Model it |
|---|---|---|---|
| SBA 7(a) loan | US buyers of profitable owner-operated businesses who can put in equity and personally guarantee the loan | Minimum 10% equity injection for a change of ownership; lease and DSCR tests; personal guarantee | SBA loan calculator |
| Seller note | Bridging a valuation gap or reducing the cash you need at closing | Standby and subordination terms set by the senior lender; balloon payments | Seller financing calculator |
| Conventional bank loan | Strong borrowers, asset-heavy businesses or larger down payments | Shorter terms and higher payments than many SBA loans; collateral requirements | Acquisition financing calculator |
| Equipment financing | Businesses where machines or vehicles are a large part of the value | Adds a second payment to cover; equipment age limits what can be financed | Acquisition financing calculator |
| Investor equity | Buyers without enough equity of their own, or larger deals | Dilution and governance; under SBA rules, minority investor equity shares the same half-of-injection cap as seller standby debt | Deal Analyzer |
The SBA equity rule in one line: for a complete change of ownership, at least 10% of total project costs must be buyer equity; a fully-standby seller note and minority investor equity together can supply at most half of that 10%. Source: SBA SOP 50 10 8.1 (effective 1 October 2026). Confirm current rules with your lender.
Questions
How much down payment do I need to buy a business with an SBA loan?
Under SBA SOP 50 10 8.1 (effective 1 October 2026), a complete change of ownership financed with a 7(a) loan needs a buyer equity injection of at least 10% of total project costs. Lenders can require more.
Can a seller note count toward the SBA equity injection?
Only if it is subordinated to the lender and on full standby, with no principal or interest payments, for the life of the 7(a) loan. Seller standby debt plus any minority investor equity can cover no more than half of the required injection.
What DSCR do lenders look for?
There is no single number; each lender sets its own. Many acquisition lenders look for comfortable coverage above 1.0x, often around 1.25x or more, after a reasonable owner salary. Test your deal at the level your lender quotes.
The Bootstrapper Brief
One deal, taken apart, every week.
- A real-world deal structure walked through with the Deal Toolkit
- A template, checklist or calculator you can use the same day
- Plain-English notes on valuation, financing and diligence. No hype, no paid placements.