This is the liquid capital you can commit to the acquisition. Do not include money you'll need for working capital, closing costs (~2–4% of purchase), and first-year operations.
Lenders typically require that loan payments can be covered by the business's cash flow with a 1.25× DSCR (Debt Service Coverage Ratio). Leave blank to calculate based on cash only.
Canadian acquisition lenders (BDC, chartered banks, credit unions) typically require a minimum 25–40% down payment for SMB acquisitions. The loan amount is limited by the business's cash flow — lenders want to see that the business can cover loan payments with a Debt Service Coverage Ratio (DSCR) of at least 1.25×.
A DSCR of 1.25× means the business generates $1.25 for every $1.00 of annual debt service. A business with $180,000 SDE could service roughly $144,000/year ($12,000/month) in loan payments.