Two worlds. We build the bridges.
How Do I Pay for This Business?
Enter a purchase price, the business's earnings, and the cash you have. We show you the SBA 7(a) loan, the guaranty fee, the cash you need to close — and the gap, if there is one. Most deals that struggle here struggle on cash, not on the lender test.
Start with the money you have, not the loan you hope for. A deal can pass the lender's test and still not close, because the buyer is short on cash to close. This finder shows both tests side by side.
Have a deal in mind? Price it in the full acquisition calculator → · Not sure what you can afford? Check the reverse calculator →
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Not sure which business yet? See all 19 industries you can afford →
Where the money comes from
Uses and sources for the whole project. They must balance — if they don't, the gap is shown as money still to find.
| Uses — what it costs | Amount |
|---|
| Sources — where it comes from | Amount |
|---|
The loan, line by line
| Line | Amount |
|---|
0% guaranty fee, sometimes: loans of $700,000 or less to manufacturers, listed food-supply-chain businesses, or rural businesses carry a 0% fee in FY2027. This finder does not apply it by default — ask your lender whether your deal qualifies.
SBA checks
Four tests a lender runs on a change-of-ownership loan. All four must pass for the structure to work.
| Check | Required | Yours | Result |
|---|
DSCR is tested on historical earnings under SOP 50 10 8.1 — projections cannot satisfy it. One secondary source puts the documented floor at 1.15x with most lenders underwriting to 1.25x; this finder uses 1.25x.
California: credit help, not grants
No verified California grant pays a buyer to acquire an existing business. What California offers is credit enhancement — guarantees and loss-reserve backing that help a lender say yes. None of these is a grant, and none of them pays the seller. Ask your lender whether your acquisition loan can use them.
IBank Small Business Loan Guarantee Program
California's IBank guarantees part of a loan made by a participating lender, so the lender can approve a borrower it would otherwise turn down. The guarantee protects the lender — it does not reduce what you owe. Delivered through seven Financial Development Corporations (FDCs). IBank's program page does not publish cap figures, so confirm the current guarantee with an FDC. $457M in loans supported in FY 25-26; $3.3B since FY 13-14.
For small businesses with 1–750 employees. Rolling — no deadline. Source: ibank.ca.gov/small-business/loan-guarantees/
CalCAP for Small Business
A loan loss reserve run by the State Treasurer's office (CPCFA), funded by federal SSBCI money. Your lender and you each pay 2–3.5% of the loan into a reserve; CalCAP matches it. Maximum loan $5,000,000; maximum enrolled $2,500,000 per borrower over 3 years. For businesses with 1–500 employees, primary business in California. Rolling — no deadline.
Buying an existing business is not named as an eligible use — ask your lender whether your acquisition loan can be enrolled. Sources: treasurer.ca.gov — CalCAP summary · general info
CalCAP Collateral Support
CPCFA pledges cash to your lender to cover a collateral shortfall — for buyers whose business assets don't fully secure the loan. Cash pledge 40% of the loan, plus 10% more in a Severely Affected Community or for socially/economically disadvantaged owners. Maximum pledge $10,000,000. Loans $25,000–$20,000,000; support up to 5 years.
Source: treasurer.ca.gov — Collateral Support · program manual (2024)
SBA Lender Match — free, and it works in every state
A free SBA tool: answer a ~5-minute questionnaire and lenders who are interested reach out within about two business days. About 800+ participating lenders. Not a loan application, and no guarantee of a match or a loan.
Source: sba.gov/loans/lender-match/
Working capital after the purchase
SBA CAPLines and the Working Capital Pilot are revolving lines for receivables and inventory after the purchase — separate from the term loan that buys the business. Sized on the borrowing base, not on the purchase price; typically 5–10 years, revolving. This finder does not size the line — ask your lender.
Source: SBA 7(a) lender terms
Deliberately not listed: California Dream Fund, COVID relief grants, the Rebuilding Fund, CalSEED, and IBank Jump Start — all closed or unverifiable as of Nov 14, 2026. General grants directories are excluded too: they don't fit buying a business, and padding the list with them would mislead you.
Buying in California?
The three California programs below apply to California businesses only — pick California above to see them. The SBA loan math and SBA Lender Match work in every state.
SBA Lender Match — a free SBA tool: a ~5-minute questionnaire, and lenders who are interested reach out within about two business days. About 800+ participating lenders. Not a loan application, and no guarantee of a match or a loan. Source: sba.gov/loans/lender-match/
What would change the answer?
Built for your deal, not just the model
Want this run on your actual numbers?
This finder uses a typical SBA rate and standard terms. Your deal has its own earnings, its own lender, and its own diligence questions — David runs those by hand.
- Model Build — $1,500 · a full acquisition model built for your deal
- Valuation — $950 · an independent read on what the business is worth
- FP&A Advisory — $125/hr · diligence, cash flow, and lender questions, answered
Built by David Hu, Director of Finance & Accounting, MBA — 15+ years in manufacturing and logistics finance.
Questions buyers actually ask
How much cash do I need to buy a business?
Under SBA 7(a) rules the buyer must put in at least 10% of the total project cost, with at least 5% of the project cost from the buyer's own funds. On top of the down payment you need closing costs (about 2% of the price here) and a working-capital buffer ($25,000 here). This finder adds it all up as cash to close — and shows the gap if your cash falls short.
Can the seller finance part of the price?
Yes. A seller note counts toward the equity injection only if it is subordinated and on full standby — no principal or interest payments for the whole SBA loan term — documented on SBA Form 155. A note that is not on standby does not count toward the injection. Earnouts are prohibited in SBA change-of-ownership loans.
Does California offer grants to buy a business?
No verified California grant pays a buyer to acquire an existing business. What California offers is credit enhancement: IBank loan guarantees and CalCAP loss-reserve backing that help a lender approve the loan. Ask your lender whether your acquisition loan can use them; none of them is a grant.
When is a quality-of-earnings report required?
For a purchase price of $3,000,000 or more, SBA SOP 50 10 8.1 requires an independent quality-of-earnings (QoE) report, engaged by the lender, with Cash Proof for the trailing twelve months plus the prior two fiscal years. The lender must use the QoE's normalized earnings for the DSCR test. A seller-ordered QoE does not satisfy the rule.
Where the numbers come from
Loan rate 9.50% — typical approved acquisition pricing at prime 7.00% (Federal Reserve H.15, Nov 13, 2026; SBA FOIA loan-level analyses put typical acquisition pricing at roughly 9.25%–9.75%). The 10.00% sensitivity is the SBA maximum for loans over $350,000. Re-check after the Dec 8–9 FOMC meeting.
Term 10 years, monthly — SBA 7(a) maximum maturity for a business acquisition.
Down payment 10% of total project cost; at least 5% from your own funds — SOP 50 10 8.1, Appendix 15.
Guaranty fee, FY2027 — SBA Information Notice 5000-881797: 2% of the guaranteed portion (85% guaranty) for loans up to $150,000; 3% of the guaranteed portion (75% guaranty) for $150,001–$700,000; 3.5% of the guaranteed portion up to $1,000,000 plus 3.75% above, for larger loans. The fee may be financed into the loan.
DSCR 1.25x — SBA 7(a) test under SOP 50 10 8.1, effective Oct 1, 2026, on historical earnings.
Seller notes and earnouts — SOP 50 10 8.1, Appendix 15: a note counts toward equity only on full standby (SBA Form 155); earnouts are prohibited.
QoE at $3,000,000+ — SOP 50 10 8.1, Chapter 7, with Information Notice 5000-882227.
California programs — IBank Small Business Loan Guarantee Program; CalCAP for Small Business and CalCAP Collateral Support (California State Treasurer / CPCFA); SBA Lender Match. All checked Nov 14, 2026. IBank cap figures are secondary-sourced and not printed here — confirm them with an FDC.
Closing costs 2% and the $25,000 buffer — planning conventions from the Parallel Space calculators, not SBA rules; labeled as such on the page.
9.50% is a reasoned estimate, not an SBA-stated rate — the SBA does not publish a typical-rate table. The verified typical range is 9.25%–9.75% for acquisitions at prime 7.00%.
Disclaimer: Estimates only, not a loan offer. This free tool is an educational planning tool, not investment, accounting, tax, or lending advice. It uses a typical SBA rate and standard terms, not any lender's actual offer. Verify rates, fees, eligibility, and program terms with your lender before relying on the output.
Built by Parallel Space
Two worlds. We build the bridges.
Parallel Space builds free tools for small business buyers — price a deal, check what you can afford, and run the numbers before you make an offer.