Exact fees, equity injection, amortization & monthly payment breakdown for business acquisition loans
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Compare your rate against common SBA 7(a) rate scenarios for the same loan amount and term.
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Debt Service Coverage Ratio (DSCR) measures whether business cash flow covers loan payments. SBA lenders typically require ≥1.25x global DSCR.
This calculator is purpose-built for SBA 7(a) business acquisition loans — the most common financing tool when buying an existing small business. Unlike generic loan calculators, it accounts for the SBA guarantee fee structure, equity injection requirements, packaging fees, and roll-in financing options that are unique to government-guaranteed lending.
Input the total business purchase price as negotiated with the seller. This includes goodwill, inventory, equipment, and any real estate if included in the transaction.
SBA policy requires a minimum 10% equity injection for business acquisitions (down from 20–30% with many conventional lenders). Your equity injection can come from personal savings, seller financing on a standby basis, or a gift from a family member. The calculator syncs the percentage and dollar fields automatically.
SBA 7(a) loans used for business acquisitions (working capital and goodwill) max out at 10 years. If the purchase includes commercial real estate, the term can extend to 25 years. The interest rate is variable by default, tied to the WSJ Prime Rate plus a lender spread capped by SBA regulations.
The SBA charges an upfront guarantee fee on the guaranteed portion of your loan (75% for loans over $150K; 85% for loans ≤$150K). The fee tiers in 2025 are: 2% for amounts up to $150K, 3% for $150K–$700K, and 3.5% for $700K–$5M. Most borrowers roll this fee into the loan to preserve cash at closing.
The SBA guarantee fee is a one-time upfront fee charged on the guaranteed portion of an SBA 7(a) loan. For 2025, the fee is: 0% for veterans on loans ≤$1M; 2% for the guaranteed portion up to $150K; 3% for $150K–$700K; and 3.5% for $700K–$5M. The guaranteed portion is typically 75% of the loan amount (85% for loans ≤$150K). This fee can be rolled into the loan or paid at closing.
The SBA Standard Operating Procedure (SOP 50 10 7) requires a minimum 10% equity injection for business acquisitions. This means if you're buying a business for $500,000, you need at least $50,000 in equity. Lenders may require more depending on the deal quality, your credit, and the business's cash flow. The equity cannot come from borrowed funds (except subordinated seller financing on standby for 24 months).
SBA 7(a) variable rates are tied to the WSJ Prime Rate plus a lender spread. As of mid-2025, the Prime Rate is 7.50%. With the maximum spread of 2.75% for loans over $50K, the maximum variable rate is approximately 10.25%. Fixed-rate SBA loans are available but less common and tend to be slightly higher. Rates fluctuate with Federal Reserve policy decisions.
SBA 7(a) loans can fund most for-profit businesses, including restaurants, retail stores, service businesses, manufacturing companies, and franchises. Ineligible businesses include passive businesses, life insurance companies, businesses engaged in lending, gambling, and certain others. The business must be owner-operated post-acquisition and meet SBA size standards.
Standard SBA 7(a) loans typically take 60–90 days from application to closing. SBA Express loans (up to $500K) can close in 30–45 days. The timeline depends on your lender's processing speed, business complexity, appraisal requirements, and SBA review times. SBA Preferred Lenders (PLP lenders) can approve loans in-house without submitting to the SBA, which significantly speeds up the process.
Most SBA lenders require a global DSCR of 1.25x or higher, meaning the business must generate $1.25 in net operating income for every $1.00 of annual debt service. Some lenders may accept 1.15x for strong borrowers. The DSCR is calculated on a global basis, meaning it includes all personal and business debt obligations of the borrower, not just the new SBA loan payment.
Yes. Seller financing is allowed and can be counted toward the 10% equity injection requirement if it is on full standby (no payments of principal or interest) for 24 months post-closing. After the standby period, seller note payments must be included in the global DSCR calculation. This structure is commonly used when the buyer has limited liquid capital but strong cash flow exists to support all debt.