A free small business acquisition model template in Excel, with an SBA loan solved in closed form
The add-back bridge from reported profit to the lender's EBITDA, sources and uses with the guaranty fee and valuation cap solved tier by tier, ten years of coverage, and the exit: eight linked sheets, one fictional deal, no macros.
The file prices the purchase of Cedar Ridge Mechanical, a fictional HVAC service contractor listed at $3,209,500, 3.5 times the broker's seller's discretionary earnings. The buyer pays $2,600,000, 3.85 times the $676,000 of EBITDA that survives quality of earnings, funded by a $2,340,000 SBA 7(a) loan, two seller notes, and $162,897 of the buyer's own cash. The lender's own coverage test reads 1.56 times in year one; the cash actually left over, after capex, working capital and tax, covers debt service only 0.96 times. Every one of those numbers is a formula you can move.
Download the template
One Excel file, no macros, nothing locked. No account, no email address.
Eight sheets, in the order the calculation runs. Blue type is an input you may change, on the Inputs sheet only; black type is a formula.
Start_Here
What the workbook is, its conventions, and what changed in the most recent revision.
Inputs
Every driver: the seller's three years of reported results, the broker's add-backs beside the ones that survive quality of earnings, the price and working-capital terms, the SBA loan's fee tiers and rate, the two seller notes, tax elections, and the exit assumptions.
SDE_Bridge
The bridge from reported pre-tax income to the broker's seller's discretionary earnings and, after quality of earnings, the lender's adjusted EBITDA, with every add-back the broker claims set against the one that actually survives diligence.
Sources_Uses
Sources and uses, the SBA guaranty fee and the valuation cap solved in closed form tier by tier, and the lender's own debt-service coverage test.
Operations
Ten years of revenue, adjusted EBITDA, capex, tax, both loans amortizing, and the buyer's free cash flow, with the lender's coverage ratio and the cash coverage ratio side by side every year.
Exit_Returns
Exit value at the same multiple as entry, the tax on the sale by asset class, the buyer's cash flows year by year, and the IRR and multiple on the cash actually invested.
Scenarios
Which single input reproduces each sensitivity the book prints: price, prime rate, revenue loss, bonus depreciation, tax-loss use, and the valuation cap's two readings.
Check
Every figure the book prints, set against the live cell that computes it: 60 checks, each with its own tolerance and status.
What the worked deal returns
Measure
Value
Asking price (broker's listing, 3.5x broker SDE)
$3,209,500
Purchase price paid
$2,600,000
Entry multiple (price / adjusted EBITDA)
3.85x
SBA 7(a) loan
$2,340,000
Buyer's cash at closing
$162,897
Lender's DSCR, year 1
1.56x
Cash DSCR, year 1 (after capex and tax)
0.96x
IRR on cash invested, 5-year hold
64.1%
Multiple of cash invested
8.17x
Read the middle four lines together. The lender approves the loan at 1.56 times coverage, well clear of its own 1.25 times minimum, but that ratio is measured on adjusted EBITDA before capex. Once $260,000 of first-year capex, mostly the catch-up maintenance the seller had deferred, comes out of the same EBITDA, cash coverage falls to 0.96 times: the business does not quite cover its own debt service in cash in year one. The lender's test and the buyer's cash reality are two different questions, and only the second one asks whether the buyer can make payroll.
How to use it on your own deal
Open Inputs and overwrite the blue cells: the seller's reported results, the add-backs you can defend after your own quality of earnings, the price, and the SBA terms.
Read Sources_Uses first. The "Check: sources = uses" line must read zero, and the lender's DSCR result must say PASSES before you go further.
Read the cash DSCR beside the lender's DSCR on Operations every year, not just at closing: it can dip while the lender's own ratio still passes.
Change the exit year and the exit multiple on Inputs: Exit_Returns follows them.
Keep the Check sheet: once you change an input it stops matching the book, which is expected. Use its structure, and the Scenarios sheet, for your own stress tests.
Questions people ask about it
Is this small business acquisition model really free?
Yes. It is a companion file to a book. There is no sign-up, no email address and no paid version.
Does it use macros or circular references?
No macros and no circular reference: the SBA loan and its guaranty fee are solved in closed form on Sources_Uses, tier by tier, rather than iterated. The file recalculates in Excel, LibreOffice or Google Sheets without iterative calculation.
Why does the lender's coverage read 1.56x when the buyer only clears 0.96x in cash the same year?
The lender's ratio divides adjusted EBITDA by debt service. The cash ratio starts from the same EBITDA but also deducts capex, the working-capital build and the year's cash tax. In year 1 the entire gap is $260,000 of capex, most of it the catch-up maintenance the seller had deferred: no working-capital build yet and no cash tax due, so capex alone turns 1.56x into 0.96x.
Can I use it for a real acquisition?
You can reuse the structure: the add-back bridge, the loan sized in closed form, and the year-by-year coverage test. Cedar Ridge Mechanical and every figure in it are fictional, SBA rules and fees change, and nothing here is investment, tax or legal advice.
The rest of the files
This template is one of the companion files for Buying a Small Business: the full set adds
a second deal built to fail its own coverage test, the same two models with the inputs emptied, thirteen working documents, forty self-marking questions, and three cases the book never takes to a number. Free, like this one.