Business Acquisition Calculator
What a deal costs to close, how it is funded, and whether the business carries its own debt afterwards while still paying you.
The address carries whatever you changed, so anyone opening it sees these numbers. Nothing is saved on our side.
Cash to close
$225,000
After debt service and a $100,000 salary the business leaves $98,398 a year — a 43.7% return on the cash you put in, back in 2.3 years.
- $120,000
- 10% of the price
- $900,000
- $180,000
- 15% of the price
- $16,133
- $98,398
- And after your salary
- 1.51×
The deposit is not the cash you need
Closing costs and working capital are paid in cash on the same day, and buyers who budget only for the deposit run out of money in month one.
- Deposit53%$120,000
- Closing costs20%$45,000
- Working capital27%$60,000
- Cash to close$225,000
How the price is funded
A seller note does more than reduce the bank loan. It keeps the seller invested in the handover going well, which is why lenders often like to see one.
- Your deposit10%$120,000
- Bank loan75%$900,000
- Seller note15%$180,000
- Purchase price$1,200,000
How this calculator works
Two questions, kept separate on purpose: what you need on day one, and what happens every year after.
cash to close = deposit + closing costs
+ working capital
cash flow = earnings − your salary
− debt service
The bank loan and the seller note are amortized separately, because they almost always have different rates and terms — a seller note is typically shorter and cheaper. Payments stop when each is repaid.
What is assumed
- Earnings continue at the level you enter, from day one. Transitions are rarely that clean.
- No tax on the profits, and no capital expenditure.
- Both loans amortize fully. Balloon payments and interest-only periods are not modelled.
A worked example
A $1.2 million business earning $392,000. 10% deposit, a 15% seller note, the rest from a bank at 11.5% over ten years.
| Deposit | 10% of $1,200,000 |
|---|---|
| Closing costs | Legal, diligence, broker, lender |
| Working capital | Cash the business needs on day one |
| Bank loan | $1,200,000 − deposit − seller note |
| Seller note | 15% of the price, 6% over 5 years |
| Cash to close | Not $120,000 — half as much again |
The deposit is 53% of the cash actually required. This is the single most common budgeting mistake in a first acquisition, and it is why the breakdown above is on the page rather than buried in a note.
Questions people ask
Because closing costs and working capital are paid in cash on the same day. Legal, diligence, broker and lender fees are real money, and the business needs cash in the account on day one to make payroll before receivables arrive. Buyers who budget only for the deposit run out of money in month one, which is a bad month to run out.
Part of the price the seller finances, repaid out of the business over a few years. Sellers agree because it usually gets them a higher price and a faster close, and lenders often want to see one because it keeps the seller invested in the handover going well. A seller unwilling to carry any of the price is worth asking about.
The annual cash the business puts in your pocket after debt service and your salary, divided by the cash you actually put in. It is the return on the money at risk rather than on the purchase price, and it is the figure that makes leveraged acquisitions attractive — a modest return on a large price can be a large return on a small deposit.
Yes. Cash flow that only looks positive because you are working for nothing is not cash flow, it is an unpaid job with debt attached. Put in what you actually need to live on and see whether the deal still works.
Capital expenditure, working capital growth as the business grows, tax on the profits, and any transition costs — the customers who leave when the founder does, the systems that turn out to be the owner's head. It also encodes no lender programme rules: the deposit, rate and term are yours to enter, because they differ by lender and by programme and they change.
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An estimate for planning. It encodes no lender programme rules, no tax and no capital expenditure, and it is not a substitute for advice from a broker, an accountant or a lender.