Can I afford this business?

The question every buyer needs answered before wasting three months. Enter the deal and see whether it covers its own debt — and what is left for you.

Asking price

Seller's discretionary earnings

Profit before the owner's salary, interest, taxes, depreciation and personal add-backs. What counts.

Salary you need to live on

Cash you can put in

Seller note (% of price)

On full standby a seller note can count toward your injection.

Rate (prime + spread)

Term

Debt service coverage

Your take-home after payments

SBA loan needed

Monthly payment

Cash at closing

Max price you'd clear

Cash you need at the table

Your equity injection
SBA guaranty fee
Closing & packaging
Working capital cushion
Total

The cushion is not optional. Buyers who close with nothing spare are the ones taking a cash advance eight months later.

If it gets worse

stress test

Most lenders want 1.15× or better. Below 1.0 the business cannot pay its own loan.