Business acquisition loan calculator

Buying a business costs more than the down payment. Estimate your monthly loan payment and the cash you need for the purchase, fees, and a working capital reserve. Then see how a higher interest rate changes the payment.

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Purchase price ($)

Cash down payment (%)

Annual interest rate (%)

Repayment term (years)

Fees paid in cash ($)

Working capital reserve ($)

Estimated monthly loan payment

$6,199

Loan amount: $450,000
Cash down payment: $50,000
Cash needed including fees and reserve: $90,000
Annual debt service: $74,385
Total interest over the term: $293,850
Monthly payment if rate rises 2 points: $6,719

Illustrative fixed-rate, fully amortizing loan. Fees and reserve are paid in cash here. Excludes seller debt, taxes, insurance, and fees financed into the loan. Defaults are examples, not lender quotes or eligibility requirements.

How to use the calculator

Enter the purchase price and the percentage you plan to pay in cash.
Use the rate and repayment term from your lender’s quote, or compare illustrative scenarios.
Add professional and closing fees you will pay separately, plus the cash reserve you want after closing.
Compare the annual loan payment with the business’s verified cash flow. Allow for your own compensation, equipment replacement, and changes in working capital.

Example: buying a $500,000 business

With 10% paid in cash, you borrow $450,000. At an illustrative 11% annual rate over 10 years, the monthly payment is approximately $6,199. Add $15,000 in cash-paid fees and a $25,000 reserve to the $50,000 down payment, and the initial cash budget becomes $90,000.

At 13%, the same loan costs about $6,719 per month. The extra $520 each month comes out of the cash available to you. This comparison holds the original loan balance and term constant; it is not a forecast of a variable-rate loan’s future payments.

How the payment is calculated

Monthly payment = P × r ÷ (1 − (1 + r)⁻ⁿ), where P is the amount borrowed, r is the annual interest rate divided by 12 and expressed as a decimal, and n is the number of monthly payments. At zero interest, the payment is simply the loan amount divided by the number of payments.

Cash needed = down payment + fees paid in cash + working capital reserve. If your lender finances fees or working capital, request the actual total loan amount: this simple purchase-price model does not add those amounts to principal.

Can I use this for an SBA acquisition loan?

You can model level monthly principal-and-interest payments using the rate and term your lender supplies. The calculator does not determine SBA eligibility, required equity, guarantees, or approval. Check the SBA’s 7(a) program information and confirm the complete structure with your lender.

What if the seller finances part of the purchase?

This model assumes a single loan. Use the seller financing calculator to model a separate seller note, including a balloon or a period without payments. Avoid counting the seller-financed amount in both loans.

Can the business afford the payments?

A payment estimate is the starting point. Use the DSCR calculator to compare debt service with cash available after owner compensation. If the listing’s earnings include add-backs, work through the SDE calculator first. A low monthly payment alone does not make an acquisition attractive.