How much down payment is required for an SBA loan to buy a business?

SBA 7(a) loans for business acquisitions require a minimum 10% buyer equity injection. Up to half (5%) can be a seller note on full standby for 24 months.

What is the maximum SBA 7(a) loan amount?

The SBA 7(a) program caps loans at $5 million. Amortization is typically 10 years for business acquisitions and up to 25 years when real estate is included.

What DSCR do SBA lenders require?

Most SBA lenders underwrite to a minimum 1.25x debt service coverage ratio (DSCR). Stronger deals show 1.5x or higher after the new owner's salary.

SBA 7(a) Loan Calculator for Buying a Business

Estimate your monthly SBA payment, required buyer equity, and debt-service coverage before you make an offer. Built for service-business acquisitions — HVAC, plumbing, electrical, landscaping, cleaning, and more.

Deal inputs

Purchase price

Seller's Discretionary Earnings (SDE)

Your replacement salary

Buyer equity %

Seller note %

SBA interest rate

SBA amortization (years)

Your results

Buyer cash injection: $120,000
Seller note: $120,000
SBA 7(a) loan: $960,000
SBA monthly payment: $13,497
Seller note monthly: $2,579
Total annual debt service: $192,917
SDE after your salary: $230,000
DSCR: 1.19x
Cash-on-cash return: 30.9%

DSCR of 1.19x is below the 1.25x SBA threshold. Increase the down payment, lower the price, or extend amortization.

See real deals matching your buy-box

How SBA 7(a) loans for business acquisitions work

The SBA 7(a) program is the most common financing path for buying a service business in the US. Loans go up to $5M, amortize over 10 years (25 if real estate is included), and require a minimum 10% buyer equity injection — half of which can come from a seller note on full standby.

What lenders underwrite

• DSCR ≥ 1.25x after a market-rate replacement salary for the buyer
• 3 years of business tax returns plus interim financials
• Buyer's personal credit (typically 680+), industry experience, and liquidity
• Clean licensing transfer (especially for HVAC, plumbing, electrical)

Common deal structures

A typical service-business acquisition uses 10% buyer cash + 10% seller note (on standby) + 80% SBA 7(a). For stronger deals, lenders accept 5% buyer cash + 5% seller note. Always model DSCR with the seller note included — many buyers forget it.