Structure the purchase of a business using seller financing, asset-based funding, earnouts, and equity partners — and estimate the remaining purchase-price cash gap under your assumptions. Free, private, no signup.
Purchase Price
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Proposed Funding Stack
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Estimated Cash Gap
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Enter your own deal below, or try a sample structure.
Start with your own deal figures. Optional funding sections below are closed until you need them.
This model does not establish financing availability. Fees, taxes, reserves, debt-service affordability and lender requirements need separate review. Jump to the funding summary.
1. Valuation & Offer
Start with the seller's ask and the company's earnings. The calculator compares the ask against an earnings-multiple estimate and displays the lower of that estimate and the asking price. Not sure what to enter? Hover the ? on any field, or read every input explained.
Implied ask multiple—
Multiple delta (ask − industry)—
Earnings-multiple estimate—
Lower of ask / earnings estimate—
Net valuation after discount—
Purchase price—
2. Funding From the Business's Own Assets
The assets you're buying can fund the purchase. Enter each asset's value, carve out anything the seller keeps, and set the percentage each funding method realistically converts to cash. How each method works →
Asset
Current Value?
Carveout?
Available
Funding Method
Net %?
Net to Funding
Total
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Total Asset Funding
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3. Seller Financing & Earnout
Most acquisition deals include seller financing. An earnout ties part of the price to future performance.
Seller financing amount—
Earnout amount—
4. Intellectual Property Funding
Defensible IP — patents, trademarks, data — can be licensed, sold, or borrowed against to generate deal cash.
IP Asset
Cash to Deal
Total IP Funding
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5. Debt Assumption
Existing debt you take over ("subject-to") reduces the cash portion of the price. Enter what the seller pays off before closing.
Liability
Balance?
Seller Pays Off?
You Assume?
Total Assumed
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6. Equity Partners
Operators ("integrators") buy in for equity; outside investors purchase a stake priced off the higher of ask or FMV.
Operating Partner
Equity %
Total operator equity
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Operator buy-in cash—
Valuation used for investors—
Cash from investors—
7. Your Deal Stack
These proposed layers reduce the modeled purchase-price cash gap. Confirm each source is available at closing and avoid counting the same asset twice; fees and operating reserves are additional.
Purchase price—
Less: operator equity buy-in—
Less: investor capital—
Less: seller financing—
Less: earnout—
Less: assumed debt—
Less: carveouts—
Gap before asset and IP funding—
Less: asset-based funding—
Less: IP funding—
Remaining purchase-price gap—
Saved scenarios (this browser only)
How This Business Acquisition Calculator Works
A purchase can combine several funding sources, known here as a deal stack. This calculator adds the amounts you propose and estimates the remaining purchase-price cash gap. It does not establish that a lender, seller or investor will provide those amounts. The seven sections are:
Valuation first. The tool compares the asking price with earnings multiplied by your chosen multiple. This is a scenario estimate, not an appraisal or a recommended offer.
Asset-based funding. The company's own balance sheet — receivables, inventory, equipment, real estate — can be converted to cash at closing through factoring, sale-leasebacks, consignment, and refinancing.
Seller financing. Enter the portion of the price the seller has agreed to defer. Repayment terms, security and any senior lender restrictions need separate agreement.
Earnouts. Part of the price is only paid if the business hits agreed performance targets — aligning incentives and lowering closing cash.
Debt assumption. Taking over existing liabilities "subject-to" reduces the cash purchase price dollar-for-dollar.
Equity partners. Only cash-paid equity purchases contribute funding here. Shares granted for work, expertise or future services do not provide closing cash.
IP monetization. Patents, trademarks, and proprietary data can be licensed or financed to produce additional closing cash.
If proposed funding exceeds the modeled purchase price, the arithmetic becomes negative. That is a signal to check the structure, not proof you will receive cash at closing. Funding sources can overlap, collateral cannot necessarily support multiple loans, and closing costs and operating reserves still require a separate budget.
When to Walk Away From a Deal
A calculator can model the structure, but discipline closes good deals. Watch for these red flags: an asking price far above the industry multiple with no defensible reason, financial records or liabilities the seller will not substantiate, declining revenue hidden behind one-time spikes, and customer concentration above 30%. The "multiple delta" figure in section 1 shows instantly how far the ask deviates from market norms — anything above 1× over the industry multiple needs strong justification like recurring revenue, defensible IP, or strategic synergies.
A proposed funding stack can cover the modeled purchase price, but this calculator cannot establish a zero-cash closing. Seller and lender approval, collateral, closing expenses and operating reserves must be checked separately. An illustrative example is not evidence that financing is available.
What is a "deal stack"?
A deal stack is the layered combination of funding sources used to pay for an acquisition: seller financing, asset-based funding, assumed debt, earnouts, investor capital, and operator equity. Each layer reduces the cash the buyer must personally bring to closing.
What's the difference between SDE and EBITDA?
SDE (Seller's Discretionary Earnings) adds the owner's salary and personal perks back to profit — it's the standard for businesses under roughly $1M in earnings. EBITDA assumes a market-rate manager replaces the owner and is used for larger companies. Use whichever figure your industry's multiples are quoted in.
What percentage will a seller typically finance?
There is no verified typical percentage supplied by this calculator. Enter terms supported by an actual seller discussion or agreement. The seller may decline financing, and any senior lender can impose additional conditions.
What is a carveout?
A carveout is any asset excluded from the sale — for example, the seller keeps their personal securities account or a company vehicle. Carveouts reduce what you're buying, so they reduce the price you should pay. The calculator subtracts them automatically.
Is my data stored anywhere?
Calculations run locally in your browser. Entered figures stay in your browser. If you choose Save scenario, those figures are saved on this device until you delete the scenario.
How much money do I actually need to buy a business?
Use the modeled purchase-price gap as one part of a separate closing budget. Add professional fees, taxes, lender costs and working-capital reserves, and confirm which proposed sources can actually fund at closing. The calculator does not determine a required down payment or loan eligibility.
Is seller financing actually common?
Seller financing is one possible acquisition structure. This site does not have a verified transaction dataset establishing its prevalence. Evaluate the seller's actual willingness and the repayment terms rather than assuming it will be available.
How do I know if a business is priced fairly?
Compare normalized earnings, comparable completed transactions, assets, debt and business-specific risks with qualified help. The multiple you enter produces an estimate; the calculator cannot determine fair market value or identify an overpriced business on its own.
How long does it take to buy a business?
Typically 2—6 months from first conversation to closing. Seller-financed deals can move faster; SBA-financed deals are slower due to underwriting. The bottleneck is usually due diligence — verifying the financials and contracts before you commit.
What credit or qualifications do I need for seller financing?
Because the seller acts as the bank, they'll usually vet you much like a lender would — reviewing your credit, relevant experience, and a personal financial statement, and typically requiring a personal guarantee. Strong credit and demonstrated competence to run the business matter more than a specific score.
What are the biggest red flags when buying a business?
Customer concentration (one client >10—15% of revenue), declining margins with no clear cause, heavy owner dependence, revenue that doesn't reconcile to tax returns, undisclosed liabilities or litigation, and a seller who won't explain why they're selling or refuses any financing. See the due diligence checklist.
What does it mean that a business is "owner-dependent"?
It means the business relies on the current owner's relationships, skills, or daily involvement to function. If those leave with the seller, you may be "buying a job" rather than a self-sustaining business — which lowers what it's worth and raises your risk. Always ask what happens to revenue when the owner steps away.
Do I need a business broker to buy a business?
No, but brokers can surface listed deals and help with paperwork. Many of the best opportunities are off-market — found by approaching owners directly — which is also where motivated sellers and flexible terms tend to be. Either way, engage your own attorney and CPA; a broker typically represents the seller.
Sources & further reading
These official resources explain loan eligibility and asset-sale reporting. They do not verify this calculator's funding assumptions or establish valuation multiples; enter a multiple supported by comparable transactions and professional advice.