Estimate your SBA 7(a) loan payment, debt service coverage ratio, and cash to close on a business acquisition — grounded in the current SBA SOP 50 10 8 and FY2026 rates. Then see the highest price the cash flow can carry.
Since June 1, 2025, SBA 7(a) acquisition underwriting runs on SOP 50 10 8 — and most financing articles still describe the old rulebook. The three rules this calculator is built around:
Go deeper: the 2026 SBA loan requirements, rule by rule, how the seller-note standby rule really works, and how much cash you actually need to buy a business.
Illustrations at the 9.75% variable cap, 10-year term, 10% down, no seller note, guaranty fee financed. “Cash flow needed” is cash flow after a replacement owner salary and CapEx, clearing a 1.25× lender-norm DSCR — run your own deal in the calculator above.
| Purchase price | Cash to close (10%) | SBA loan | Monthly payment | Cash flow needed (1.25×) |
|---|---|---|---|---|
| $500K | $50,000 | $450K + $10.1K fee | ≈ $6,000 | ≈ $90K |
| $1M | $100,000 | $900K + $23.6K fee | ≈ $12,100 | ≈ $181K |
| $2M | $200,000 | $1.8M + $48.1K fee | ≈ $24,200 | ≈ $363K |
| $5M | $500,000 | $4.5M + $124.1K fee | ≈ $60,500 | ≈ $907K |
Debt service coverage ratio (DSCR) is the cash flow available for debt service divided by annual debt service. Most SBA 7(a) lenders underwrite acquisitions to a minimum DSCR around 1.25× — meaning $1.25 of normalized cash flow for every $1.00 of loan payments. The SBA SOP sets a 1.10× floor for 7(a) small loans (≤$350,000); minimums for larger standard loans vary by lender. This is an estimate, not underwriting advice — confirm with your lender.
The SBA requires a minimum equity injection of 10% of total project costs — the all-in deal, including working capital and closing costs, not just the purchase price — for a complete change of ownership. A seller note can count toward that 10%, but only for up to half of it, and only if the note is on full standby (no principal or interest payments) for the entire life of the SBA loan. Lenders may require more than 10% for high goodwill or limited buyer experience.
SBA 7(a) rates are capped at a base rate — usually WSJ Prime, 6.75% as of June 2026 — plus a maximum lender spread set by loan size. For the $1–5M loans typical of a business acquisition, the variable-rate cap is Prime + 3.0%, about 9.75%. That is the ceiling; many lenders quote below it, and rates change with Fed policy.
Yes, with two hard limits from SOP 50 10 8: the seller note can cover at most half of the required 10% equity injection, and it only counts if it is on full standby — no principal or interest payments — for the entire life of the SBA loan. A seller note with regular payments does not reduce your cash requirement at all; it just sits in the capital stack and its payment lands in your debt service. Many sellers decline a 10-year full standby, so plan your cash assuming you fund most of the injection yourself.
The June 1, 2025 rewrite reset how acquisitions are financed: the minimum equity injection is 10% of total project costs (the all-in deal including working capital and closing costs, not just the purchase price) for a complete change of ownership, and a seller note now counts toward that injection only on full standby for the life of the loan, capped at half the injection. Much of the internet still describes the old rules — which is why numbers from pre-2025 articles often will not survive underwriting.
Plan on roughly $100,000 for the 10% equity injection on a $1M all-in project, plus post-close liquidity your lender will want to see on top. A full-standby seller note can offset up to half the injection if the seller agrees. The guaranty fee (about $23,600 on a $900K loan) is typically financed into the loan rather than paid in cash at closing.
At the current 9.75% variable cap on a 10-year term, an SBA 7(a) loan costs about $1,310 per month per $100,000 borrowed (roughly $13.08 per $1,000). A $900K loan runs about $11,800 a month before the financed guaranty fee. Lenders quoting below the cap bring that down; rate changes move it, since most 7(a) acquisition loans are variable.