Business acquisition funding calculator.
Start from the capital you could put in, or from a deal you’re looking at. See how much a lender might fund, what it could cost each month, and how the deal reads to a lender. Built for buyers of Australian and New Zealand small businesses.
Where are you starting from?
Indicative estimates only, not a credit decision or financial advice. Results depend on the figures you enter and general assumptions. Actual borrowing depends on the lender, verified financials, security and structure. The estimates size debt against the purchase price only, and leave out working capital, transaction costs, stamp duty and stock.
How a business purchase usually gets funded.
Most small business acquisitions are paid for from three sources, stacked together.
- Your contribution. Your own cash, and any equity from investors backing you. Lenders and sellers look for real skin in the game.
- Debt. A loan, often from a bank or private lender, fills the gap. It is repaid from the business’s cash flow, so the repayment has to sit comfortably inside what the business earns.
- Deferred payment. The seller defers part of the price and is paid over time. It lowers the cash needed at completion and keeps the seller invested in the handover.
What the estimate leaves out.
- Legal, accounting and due diligence fees.
- Working capital the business needs on day one.
- Lender fees, security and covenant conditions.
- Changes in interest rates over the term.
- How vendor finance itself is repaid.
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Calculator questions.
How much of a business purchase can be funded with debt?
A lender works out three limits and lends the lowest of them:
- a share of the purchase price, often between 50% - 70% without property security and up to about 70% (or more) with it
- what the business’s earnings can comfortably repay
- a multiple of EBITDA, often around 2 to 4 times for a typical small business
The rest comes from your own cash, investors, or part of the price paid to the seller later.
What are deferred payments and earn-outs?
Both are part of the purchase price paid to the seller after settlement instead of on day one. A deferred payment is a fixed amount paid on agreed dates. An earn-out depends on the business hitting agreed targets after you take over. Either one reduces the cash and bank debt you need at settlement. When they’re documented to rank behind the bank loan, lenders generally treat them favourably.
How do lenders judge whether the business can carry the loan?
They mostly use debt service cover (DSCR): adjusted EBITDA divided by a year of loan repayments, interest and principal together. Many lenders look for about 1.5 times, meaning $1.50 of earnings for every $1 of repayments. The repayment the calculator shows includes interest.
Is this financial advice?
No. The results are indicative estimates based on what you enter and general assumptions. They aren’t a credit assessment or an offer of credit. A lender’s decision depends on verified financials, security and its own credit policy.