Business Acquisition Loan Calculator: Payment on a Business Purchase
Work out the monthly payment and total interest on a loan used to buy an existing small business — the financing structure most acquirers use to take over a going concern.
Adjust the inputs and select Calculate for a full breakdown.
Year-by-year amortization schedule
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Monthly payment | Total interest | Total of payments |
|---|---|---|---|
| $500k · 9% · 10-year | $6,333.79 | $260,054.64 | $760,054.64 |
| $200k · 10% · 7-year | $3,320.24 | $78,899.89 | $278,899.89 |
| $2M · 8.5% · 10-year (SBA) | $24,797.14 | $975,656.53 | $2,975,656.53 |
| $80k · 12% · 5-year | $1,779.56 | $26,773.35 | $106,773.35 |
How This Calculator Works
Enter the acquisition loan amount (purchase price minus down payment and seller financing), the APR, and the term. The calculator turns the APR into one constant monthly payment using the amortization formula and shows total interest across the loan.
The Formula
Fixed-Rate Amortization
P = loan amount, r = monthly rate (APR ÷ 12), n = number of monthly payments
Worked Example
A $500,000 acquisition loan at 9% APR over 10 years gives a monthly payment of about $6,334. Total repayments come to roughly $760,000, so interest adds about $260,000 across the life of the loan. The debt service has to come out of the acquired business's cash flow — making accurate due diligence on EBITDA critical.
Key Insight
Business acquisition loans are underwritten primarily against the cash flow of the target business, not the buyer's personal income. SBA 7(a) loans up to $5M dominate the small-business acquisition market because they require only 10% down (sometimes lower with seller financing), allow 10-year terms, and accept goodwill as collateral — terms no conventional bank typically matches. The trade-off is slower underwriting and a personal guarantee that survives the deal.
Frequently Asked Questions
How does SBA 7(a) financing differ from conventional?
SBA 7(a) loans up to $5M require only 10% down (sometimes less with seller carry), allow 10-year terms, and accept goodwill as collateral. Conventional acquisition loans require 25%+ down, run 5 to 7 years, and want hard collateral.
What is required for down payment?
SBA 7(a) requires 10% minimum from buyer (sometimes structured with 5% buyer plus 5% seller carry). Conventional acquisition lenders want 25% to 30% down. The down payment must be 'cash equity' — not borrowed from a third party.
Is seller financing typical?
Common — often 10% to 25% of the purchase price as a seller-carry note subordinate to the bank debt. It signals seller confidence in the business and can lower the buyer's bank loan requirement.
What rate should I expect?
SBA 7(a) acquisition loans typically price at prime + 2.25 to 2.75 — currently ~10% to 11%. Conventional small-business acquisition loans often 9% to 14%. Stronger personal credit and cash-flow coverage lower the rate.
What about working capital?
Most lenders require additional working capital lined up at closing — typically 3 to 6 months of operating expenses on top of the loan amount. Running out of working capital in month 4 is the most common reason early-stage acquirers fail.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 2 independent, dated sources. The starting values for interest rate are taken from the benchmarks below and refresh whenever the snapshots are updated.
Methodology & Review
Payments use the standard fixed-rate amortization formula. The calculator assumes a fixed APR over the term. SBA 7(a) acquisition loans typically allow 10-year terms; conventional business acquisition loans often run 5 to 7 years. The figure here is principal and interest only — closing costs, guarantee fees, and working capital reserves are separate.
Written by Ugo Candido · Last updated May 17, 2026.