How it works
Nobody tells you what order any of this happens in.
Here’s the order. Three steps, and the first one isn’t the loan.
The words start before the explanation does.
SDE. Add-backs. DSCR. Equity injection. Working capital.
You meet all five in week one. Nobody stops to define them, and asking feels like admitting you shouldn’t be here.
- You’ve read the listing four times and still can’t tell what it earns.
- You know there are things you don’t know, and you can’t name them yet.
- You’ve been told to talk to a lender, without being told what a lender will ask for.
How to buy a small business, in the order it actually happens.
1. Test the earnings before anything else.
The listing quotes SDE, seller’s discretionary earnings. It is not profit. The add-backs behind it are the seller’s argument, not a finding. Rebuild the number yourself, off the raw statements.
2. Check the loan against the number you built, not the one you were handed.
Debt coverage, break-even, and the working capital that sits on top of the down payment. It is a separate pile of money, and it is a common thing to forget.
3. Assemble the file in the order a lender reads it.
A plan, a picture of your own finances, and the documents they ask for, put together before the conversation instead of during it.
By the end you have your own number, your own answer on the loan, and a short list of what the seller still has to explain.
What you’d be working with.
- A cash flow model for your industry. Change a rate, a cost or the loan terms and the whole twelve months moves with it.
- A business plan scaffold that prompts you section by section.
- A red-flag checklist of what to verify, and what should stop the deal.
- A personal financial statement, for the picture of you a lender asks for.
Nothing uploads. Your numbers stay on your computer.
No hype. No loan promises.
This is built for buying an existing business. Starting one from scratch, there’s no seller’s number to test yet.
We can’t guarantee approval and won’t tell you whether to buy.
We’re not lenders, brokers, attorneys or CPAs. Where a question needs one, the files say so.