Business Acquisition Analyzer
Analyze the economics of buying a business the way a lender will — SDE add-backs, purchase multiple, and whether the deal still covers its debt once you pay yourself.
The Deal
SDE = the business's profit plus the current owner's compensation and personal add-backs — what the business actually generates before paying an owner-operator.
What you need to pay yourself to run this business — SDE includes the seller's comp, but not necessarily what you'll need.
The Financing
For simplicity, the seller note is assumed to amortize over the same term as the bank loan.
All figures are estimates for planning purposes — confirm actual financing terms, SDE add-backs, and required compensation with your lender and accountant before you rely on this for a real offer.
Enter the deal terms and run the analysis to see your post-acquisition DSCR, purchase multiple, and total debt service — the same read a lender would give it.
A multiple of earnings, not a balance sheet
A lender underwriting a business acquisition isn't reading a balance sheet — they're pricing a multiple of adjusted earnings, then checking whether those earnings can actually service the debt the deal requires. Two numbers do almost all the work.
- Post-acquisition DSCR — the single most common mistake buyers make is forgetting that SDE already includes the seller's own paycheck. The real test isn't whether the business covers its debt in isolation — it's whether it covers debt AND pays you a real salary at the same time. That's what this DSCR measures.
- Purchase multiple — most owner-operated small businesses trade in the 2–4x SDE range. Pay meaningfully above that and you need a specific, credible growth story to justify it — "it'll be worth it eventually" doesn't underwrite.
- Seller financing — when the seller leaves real money in the deal, it's a signal they believe the business will keep performing after they leave. Lenders read a meaningful seller note as the seller co-signing their own asking price.
- Required owner compensation — get this number honest before anything else. Underquote what you need to live on and every other number in this tool looks better than the deal actually is.