SBA Loan Calculator

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.