Business Affordability Calculator
The largest business your cash supports, and the smallest one that can pay you a living and still cover its own debt — because the constraints run in both directions.
The address carries whatever you changed, so anyone opening it sees these numbers. Nothing is saved on our side.
Most you can pay
$1,450,000
Your cash caps you here, and the smallest business that can pay you $100,000 and still cover its debt is $696,721. Anything between the two works.
- $1,450,000
- 10% deposit
- $696,721
- Smallest that services its debt
- $483,333
- At 3× earnings
- $1,305,000
- $220,173
- 1.74×
A ceiling and a floor, not two ceilings
The instinct is that a bigger business is harder to finance. At a fixed multiple it is the opposite — and that changes what you should go and fix.
- Cash ceiling
- $1,450,000
- Your deposit is a fixed share of the price, so cash caps it.
- Earnings floor
- $696,721
- Below this the business cannot pay you and its lender both.
- Coverage at any size
- 2.20×
- Where coverage settles as the business grows. A property of the multiple, rate and term — not of the target.
Earnings rise with the price; your salary does not. So a larger business covers its debt more comfortably, and the binding problem for most buyers is the deposit rather than the target’s performance.
How this calculator works
A ceiling from your cash, a floor from the earnings, and a structural check that either can be met at all.
The ceiling
max price = (cash − costs) ÷ deposit %
The floor
Coverage at a price P, with multiple m, salary S and annual debt service k per dollar of price, is
(P÷m − S) ÷ (k·P)
Setting that equal to the required ratio and solving gives the floor directly:
P = S ÷ (1÷m − required × k)
That only has a solution when 1÷m exceeds required × k. When it does not, no business of any size works under this structure — and the calculator says so rather than returning a number that quietly means nothing.
Why the floor is counter-intuitive
Most buyers assume a bigger business is harder to finance. At a fixed multiple it is the reverse: earnings scale with the price and your salary does not, so coverage improves as the business grows and settles at a ceiling determined by the structure alone.
That changes what to go and fix. A buyer stuck at the bottom needs a cheaper multiple, a longer term, or to need less salary. A buyer stuck at the top needs more cash.
Questions people ask
Because your salary does not shrink with the business. A business earning $80,000 cannot pay you $100,000 and service a loan; one earning $400,000 can do both comfortably. Below a certain size no amount of deposit fixes that, which is why the floor exists and why it is reported separately from the ceiling.
At a fixed multiple, yes — and it surprises most first-time buyers. Earnings rise in step with the price while your living costs stay where they are, so coverage improves as the business gets larger. The binding constraint for most buyers is the deposit, not the target's performance.
It is where the coverage ratio settles as the business grows without limit — determined entirely by the multiple, the rate, the term and the deposit percentage, with nothing to do with any particular target. If that ceiling is below what your lender requires, no business works under that structure, and the fix is a longer term, a larger deposit or a lower multiple rather than a different company.
Almost never. The ceiling assumes every dollar of available cash goes into the deal and that earnings hold from day one. Neither is a safe assumption in an acquisition, and a buyer with no reserve has no way to absorb the customer who leaves in month three.
Your lender. They are fields here rather than constants because they differ by lender and by programme, and they change. Nothing on this page encodes any particular programme's rules.
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An estimate for planning. It encodes no lender programme rules, no tax and no capital expenditure. Deposit requirements, rates and coverage thresholds come from your lender.