Loan to buy a business calculator
Work out how much you would need to borrow to buy a business, what the monthly repayments could be and how they compare with the profit the business makes.
How this calculator works
The loan is the purchase price less your deposit and less any part of the price the seller agrees to defer. The calculator then works out a level monthly repayment over the term at the rate you enter, the interest paid over the term and the total cost of the loan.
If you enter the business's yearly profit, it compares a year of loan repayments with that profit: as a share of profit, and as cover (profit divided by repayments). It does not include the payments due to the seller under vendor finance, fees, tax or the working capital the business needs after completion, so a real deal leaves less headroom than these figures show.
What lenders will look at
Lenders size a loan to buy a business mainly on the profit the business will make after completion, not on the price you have agreed. They count payments due to the seller alongside their own repayments, and most look for profit to cover all debt payments with room to spare; our DSCR calculator tests that in more detail.
They also look at your experience in the sector, the size and source of your deposit, any property, equipment or debtor book that can support the borrowing, and the target's accounts. Our guides to the deposit needed to buy a business and vendor finance and deferred consideration explain how each source is treated.
Find out more about acquisition finance, or tell us what you need and we will search the market for lenders suited to your case.
Questions about this calculator
How much can I borrow to buy a business?
It depends mainly on the profit the business makes and how comfortably that profit covers the repayments, plus any payments due to the seller. Security such as property or equipment, your deposit and your experience in the sector also affect the amount. Use the calculator with your own figures, then ask for real terms.
Should vendor finance be included?
Yes, if the seller is deferring part of the price. It reduces the loan you need, but lenders count the payments to the seller when they test affordability, so a large deferred element does not always mean you can borrow more.
Which rate should I enter?
Use your own assumption. Rates for a loan to buy a business depend on the lender, the security, the strength of the business and your contribution. Try a higher rate as well to see how sensitive the repayments are.
What does profit cover mean?
It is the yearly profit divided by a year of loan repayments. A figure of 2.00x means the profit is twice the repayments. The higher it is, the more room the business has if trading dips after you buy it.
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Our clients say
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A calculator can only use the numbers you give it. Tell us what the funding is for and we will search our panel of 300+ lenders for options suited to your case. No obligation, and free to enquire.