GLZR Group

Business acquisition calculator.

In brief

Price the business on what comparable companies sold for, then test whether the cash flow can carry it. In Q2 2026, businesses valued under $2 million sold for 2.0× to 3.1× seller’s discretionary earnings and those from $2 million to $50 million for 4.0× to 5.8× EBITDA (IBBA Market Pulse). An SBA 7(a) acquisition then needs at least 10% equity and debt service coverage of at least 1.15×.

Updated for SBA SOP 50 10 8.1, effective 1 October 2026U.S. · Canada · 18 Latin American markets

Selling instead? What is my business worth

The business
Amounts are in the local currency. Outside the U.S. the multiple is adjusted for country risk.
Earnings measure
USD
Trailing 12 months. SDE if the business is priced under about $2M, EBITDA above.
USD
Paid before debt service. Converts SDE to EBITDA.
USD
Leave blank to test the market estimate.
Financing
Structure
No payments while the bank loan is outstanding.

SBA 7(a) change-of-ownership loans: 10 years or less.
SBA floor 1.15×; lenders may require more.
Seller note terms
Outlook
USD
USD
0 = sell at the same multiple you bought at.

Rate defaults: U.S. prime 7.00% (Federal Reserve H.15, 2026-09-22) plus the SBA 7(a) maximum spread of 3.00% for loans over $350,000; Canadian prime 4.45% (Bank of Canada, 2026-09-16) plus 2.50 points; elsewhere each central bank’s policy rate plus 5.50 points (by country). Multiples: IBBA Market Pulse Q2 2026. Country risk: Damodaran, January 2026.

Market estimate

$1.68M – $1.86M

$1.86M

3.1× SDE · IBBA band $1M-$2M

Highest price this cash flow can finance

$2.69M

At 1.25× debt service coverage, 10.00% for 10 years.

Debt service coverage at your price

1.81×

Cash flow for debt service divided by annual principal and interest. SBA floor: 1.15×.

How the price is paid

at the market estimate

Year one, in cash

Cash-on-cash115.3%
Payback0.9 years
IRR on your cash123.1%
Equity multiple10.17×

Before income tax. Exit at the entry multiple unless you set one; loans repaid from sale proceeds.

Stress test

Debt service coverage by price and interest rate

Rows move the price by half a turn of earnings; columns move the loan rate by one point. The outlined cell is your case.

SBA SOP 50 10 8.1 checks

  • At least 10% equity injection (buyer cash plus qualifying standby seller debt)
  • Seller standby debt covers no more than half of the required injection
  • Debt service coverage of at least 1.15x
  • 7(a) loan no larger than $5 million
  • Total amortizing debt no larger than the business valuation (market estimate used as proxy)
  • Under $3M: no Quality of Earnings report required by the SOP

Rules effective 1 October 2026. SOP 50 10 8.1. A lender’s own policy may be stricter.

Send GLZR your criteria

The calculator needs JavaScript. The figures above are the worked example described below.

SBA rule change

What changes on 1 October 2026.

SOP 50 10 8.1 replaces SOP 50 10 8 for every 7(a) loan from 1 October 2026. For buyers of existing businesses, these are the rules that decide the structure. Quotes are verbatim.

A Quality of Earnings report at $3 million and up

“For Business Expansion and Initial Acquisition transactions where the Purchase Price ... is equal to or greater than $3 million, the Lender must also obtain a Quality of Earnings (QoE) in addition to the required Business Valuation.”

New in 8.1: the previous SOP contained no Quality of Earnings requirement. The report must reconcile accountant-prepared statements, tax returns, internal statements and IRS transcript data, and include a cash proof over the trailing 12 months and the last two fiscal years.

Source: SBA SOP 50 10 8.1 (effective 1 October 2026)

Price above the valuation is paid in equity

“If the amount paid for the business exceeds the business valuation, the difference must be made up by equity.”

The previous SOP let a shortfall be financed with capital subordinate to the 7(a) loan. Under 8.1 the gap between the price and the lender's independent valuation is buyer equity (or additional debt on full standby).

Source: SBA SOP 50 10 8.1 (effective 1 October 2026)

10% equity for an initial acquisition, not negotiable

“Initial Acquisition: 10%. For Initial Acquisitions, the required equity injection cannot be reduced or eliminated.”

Seller debt on full standby can count toward that 10%, but limited sources may provide no more than half of it.

Source: SBA SOP 50 10 8.1 (effective 1 October 2026)

Coverage and term

“The Applicant's debt service coverage ratio (DSC) must be equal to or greater than 1.15 on a historical and/or projected cash flow basis and 1:1 on a global basis.”

7(a) loans that facilitate a change of ownership must not have an amortization that exceeds 10 years.

Source: SBA SOP 50 10 8.1 (effective 1 October 2026)

Seller notes can be refinanced after 36 months

“Seller debt structured in conjunction with a 7(a) change of ownership transaction is eligible to be refinanced after it has been in place and current for 36 months.”

The previous SOP set this at 24 months.

Source: SBA SOP 50 10 8.1 (effective 1 October 2026)

Market data

What businesses sold for.

The calculator places the business in the enterprise-value band it lands in and applies that band’s reported multiple. The range shown is the band’s low and high over the last four second-quarter readings.

Reported multiples by enterprise value, second quarter of each year
Enterprise valueEarnings basisQ2 2023Q2 2024Q2 2025Q2 2026
Under $500KSDE2.0×2.0×2.3×2.0×
$500K-$1MSDE2.8×2.8×2.8×2.8×
$1M-$2MSDE3.0×2.8×3.0×3.1×
$2M-$5MEBITDA4.5×3.5×3.9×4.0×
$5M-$50MEBITDA4.8×5.3×5.5×5.8×

Source: IBBA and M&A Source, Market Pulse Q2 2026 Highlights. Under $2M priced on seller’s discretionary earnings (SDE); $2M to $50M on EBITDA.

Full dataset, country adjustments and downloads

Method

How the numbers are worked out.

The market estimate is earnings times the reported multiple for the band the result falls in. Cash flow for debt service is SDE minus the salary you enter, minus maintenance capex. The highest financeable price is the price at which annual principal and interest, amortized monthly, equals that cash flow divided by your target coverage, capped for SBA loans at a $5 million 7(a) loan.

Returns assume the cash flow holds (or grows at your rate), the business is sold at the end of the hold at your exit multiple, and every loan is repaid from the sale. Standby seller debt accrues no interest in this model.

Worked example

Seller's discretionary earnings$600,000
Salary to owner or manager$120,000
EBITDA (cash flow for debt service)$480,000
Size band and multiple$1M-$2M, 3.1× SDE
Market estimate$1,860,000
7(a) loan at 90% of price$1,674,000
Annual debt service, 10.00% over 10 years$265,464
Debt service coverage1.81x
Highest price at 1.25x coverage$2,690,530
Coverage if the seller asks $2,700,000 (4.5x SDE)1.25x

Limitations

  • IBBA multiples are advisor-reported figures from closed deals. The highlights do not say whether they are medians or means, and they do not separate sectors.
  • The country adjustment is GLZR’s approximation. It ignores currency, inflation and local lending conditions.
  • SBA pricing is capped at prime plus 3.00% for loans over $350,000; many loans price below the cap.
  • No income tax, no working capital, no fees unless you enter them. This is not an appraisal: an SBA lender orders its own valuation from a Qualified Source.

Questions

Buyers ask.

How much should I pay for a small business?

Start from what comparable businesses sold for, then check what the cash flow can carry. In Q2 2026, IBBA advisors reported multiples of 2.0x to 3.1x seller's discretionary earnings for businesses valued under $2 million and 4.0x to 5.8x EBITDA from $2 million to $50 million. The price that works is the lower of that range and the price your financing can support at the coverage your lender requires.

What is the difference between SDE and EBITDA?

Seller's discretionary earnings (SDE) is profit before the owner's own salary and perks, so it shows what one owner-operator takes out of the business. EBITDA deducts a market-rate salary for whoever runs it. IBBA prices businesses under $2 million on SDE and larger ones on EBITDA; this calculator converts between them using the salary you enter.

How much equity does an SBA 7(a) acquisition loan require?

At least 10% of the project cost for an initial acquisition, and under SOP 50 10 8.1 (effective 1 October 2026) that requirement cannot be reduced or eliminated. Seller debt on full standby can count toward it, but limited sources may provide no more than half of the required injection.

What debt service coverage do SBA lenders require?

The SOP sets a floor of 1.15x on a historical or projected cash flow basis (1.10x for 7(a) Small Loans). Lenders can and may apply their own higher cushion, so the calculator lets you set a target above the floor.

Can a seller note count toward my down payment?

Yes, if it is subordinated to the lender and on full standby, meaning no principal or interest payments for the term of the 7(a) loan. It can cover at most half of the required 10% injection; the rest has to be your cash or other unlimited sources.

When does an SBA lender need a Quality of Earnings report?

From 1 October 2026, for initial acquisitions and business expansions with a purchase price of $3 million or more, measured before equity, seller debt or other financing. The lender must use the report's earnings in its coverage calculation.

How does the calculator value businesses in Canada and Latin America?

It starts from the U.S. market multiple for the business's size band and adjusts it for country risk: the implied capitalization rate rises by the country's risk premium in excess of the U.S. (Damodaran, January 2026). Canada carries no excess premium, so it uses the U.S. figure. It is an approximation and ignores currency and inflation effects.

Financing changes by country too. SBA 7(a) loans are for U.S. businesses only, so elsewhere the calculator defaults to a bank loan priced at the central bank's policy rate plus 5.5 points, for example 12.00% in Mexico, 17.50% in Colombia and 19.50% in Brazil, or at 9.50% if you borrow in U.S. dollars, in which case it also shows what a 20% fall in the local currency does to your debt service coverage.

More tools

Keep going.

BuyersAcquisition calculator Price a target on 2026 multiples and test SBA 7(a) financing, coverage and returns.OwnersWhat is my business worth? Build your SDE, see the market range and what a financed buyer can actually pay.DataValuation multiples 2026 Multiples by deal size, deal financing and country-adjusted figures. CSV and JSON.