GLZR Group

What is my business worth?

In brief

Buyers price businesses under $2 million on seller’s discretionary earnings, 2.0× to 3.1× in Q2 2026 depending on size, and larger ones on EBITDA, 4.0× to 5.8× (IBBA Market Pulse). What a buyer can actually pay is what a lender will finance, so this calculator shows both, and the standby note it would take to reach your number.

Updated for SBA SOP 50 10 8.1, effective 1 October 2026For owners in the U.S., Canada and Latin America

Buying a business? Use the acquisition calculator

Your last full year
Amounts are in the local currency. Outside the U.S. the multiple is adjusted for country risk.
USD
USD
Every owner drawing a salary from the business.
USD
Health insurance, vehicle, personal expenses run through the business.
USD
USD
USD
Genuinely non-recurring: a lawsuit, a one-off rebrand. Be ready to prove it.
USD
The buyer’s side
USD
Converts SDE to EBITDA, the cash a lender counts.
USD
The price you have in mind.
Buyer financing

Your side
USD
Advisers, legal, accounting. Enter your own estimate.

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.

Your seller’s discretionary earnings

EBITDA $340,000

$450,000

Market estimate

$1.26M – $1.4M

$1.4M

3.1× SDE · IBBA band $1M-$2M

What a financed buyer can pay

$1.91M

The price at which a buyer’s loan payments meet the lender’s coverage target from your cash flow.

Standby note you would carry

at the market estimate

$0

A buyer with 10% cash and a loan at 10.00% over 10 years can finance $1,395,000 from this cash flow without a standby note.

How the price would likely be paid

IBBA advisors reported this split for $1M-$2M deals closed in Q2 2026.

Proceeds before tax$1.4M
Likely at closing$1.27M

Ready for a buyer’s diligence?

Below $3 million an SBA lender is not required to obtain a Quality of Earnings report, but it still needs an independent business valuation, and it will ask for these records.

0 of 8

What a Quality of Earnings review examines, per SBA SOP 50 10 8.1. Tick what you already have; this is a checklist, not a score.

Talk to GLZR privately

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

Definition

What is seller’s discretionary earnings?

Seller’s discretionary earnings is what the business produces for one owner-operator: net profit before tax, plus the owner’s salary and benefits, depreciation and amortization, interest and genuinely one-time costs. It is the number businesses under $2 million are priced on.

Buyers and their lenders re-build it from your records, so every add-back has to hold up. In the example below, a business reporting $250,000 of profit carries $450,000 of SDE.

Example build

Net profit before tax$250,000
Owner salary+$120,000
Owner benefits and perks+$18,000
Depreciation and amortization+$30,000
Interest+$12,000
One-time expenses+$20,000
SDE$450,000

Worked example

Seller's discretionary earnings$450,000
EBITDA after a $110,000 manager$340,000
Size band and multiple$1M-$2M, 3.1× SDE
Market estimate$1,395,000
Highest price an SBA buyer can finance (10% cash, 10.00%, 10 years, 1.25x)$1,905,792
Owner's number: $2,250,000 (5.0x SDE)above both
Standby note needed to close at that number$309,787

Selling to an SBA buyer

The rules your buyer’s lender follows from 1 October 2026.

If your buyer finances the purchase with an SBA 7(a) loan, SOP 50 10 8.1 sets what the lender can finance, and it changes what you need ready before you sell.

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)

The lender commissions the valuation, not you

“The Lender may not use a business valuation prepared for the Applicant or the seller.”

A buyer's lender orders its own valuation from a Qualified Source. A price above that number has to be closed with buyer equity or a standby note, not with more bank debt.

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 like yours sold for.

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.

How deals were paid for, Q2 2026 (% of purchase price)
Enterprise valueCash at closeSeller financingEarnoutRetained equity
Under $500K88%11%1%0%
$500K-$1M92%6%1%0%
$1M-$2M91%7%1%0%
$2M-$5M84%9%1%0%
$5M-$50M83%6%7%4%

Source: IBBA and M&A Source, Market Pulse Q2 2026. Cash at close includes senior debt and buyer equity. The $2M to $5M bar sums to 94% as published.

Full dataset and country adjustments

Questions

Owners ask.

How do I calculate my business's SDE?

Start with net profit before tax and add back the owner's salary, the owner's benefits and personal expenses run through the business, depreciation and amortization, interest, and genuinely one-time costs. Every add-back needs documentation: a buyer's lender will test it, and above $3 million a Quality of Earnings review must identify and document each one.

What multiple will my business sell for?

It depends mostly on size. In Q2 2026, IBBA advisors reported 2.0x SDE for businesses valued under $500,000, 2.8x from $500,000 to $1 million, 3.1x from $1 million to $2 million, 4.0x EBITDA from $2 million to $5 million and 5.8x EBITDA from $5 million to $50 million.

Why might a buyer's lender value my business below my asking price?

The lender orders its own independent valuation and may not use one prepared for the buyer or the seller. Under SOP 50 10 8.1, if the price exceeds that valuation, the difference must be made up by the buyer's equity, so a price above the lender's number narrows your buyer pool or asks you to carry more.

What is a seller note on full standby?

A loan from you to the buyer that is subordinated to the bank and receives no principal or interest payments for the term of the 7(a) loan, up to 10 years for a business purchase. It can count toward the buyer's equity, up to half of the required 10%. It can be refinanced after it has been in place and current for 36 months.

When will a buyer's lender need a Quality of Earnings report?

From 1 October 2026, when an SBA-financed buyer's purchase price is $3 million or more. The report reconciles your accountant-prepared statements, tax returns, internal statements and IRS transcripts, and includes a cash proof for the trailing 12 months and the last two fiscal years.

How much of the price is paid at closing?

Most of it. In Q2 2026, cash at close (senior debt plus buyer equity) was 83% to 92% of the purchase price depending on size, with seller financing between 6% and 11% and earnouts mostly 1%, except 7% in the $5 million to $50 million band.

Is this a formal valuation?

No. It is a market-multiple estimate with a financing check, built from public data. A formal valuation weighs your specific risks, and an SBA lender will commission its own from a Qualified Source.

General information, not legal, tax or investment advice, and not an appraisal. Sources checked 23 September 2026.

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