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Business valuation calculator: what your business is worth, and whether an SBA loan can buy it
By Solomon Wiesen, editor. Updated October 2026. Editorial standards | How this site is funded
Value a small business on its earnings (SDE or EBITDA) and its revenue using 2026 sale multiples by industry, then check whether a buyer could finance that price with an SBA 7(a) loan under the rules that took effect October 1, 2026. Built for owners and buyers in New York City.
- US small businesses sold for an average 2.7 times owner cash flow in the second quarter of 2026, with a median price of $349,250 (BizBuySell).
- Five-year sector averages run from 1.95 times (transportation) to 3.28 times (online and technology); restaurants average 2.18.
- Since October 1, 2026, every SBA 7(a) acquisition loan needs a business valuation, 10% equity and, for a first acquisition, 1.25 debt service coverage.
- In New York, the buyer files a bulk sale notice at least 10 days before closing or risks the seller’s sales tax bill.
What small businesses sell for, as a multiple of owner cash flow
Average sale price divided by seller’s discretionary earnings (SDE), by sector, for businesses sold through BizBuySell from Q3 2021 to Q2 2026. Hover a bar for the median sale price.
Business valuation calculator
Pick the industry, enter last year’s numbers, and the calculator builds EBITDA and owner cash flow, values the business on both earnings and revenue, then tests whether an SBA 7(a) loan can finance the purchase at that price.
Business valuation calculator
Defaults are close to the median US small business sold in 2026. Replace them with your last full year from the tax return.
1. The business
2. Buying it with an SBA 7(a) loan
Multiples are BizBuySell averages for businesses sold from Q3 2021 through Q2 2026 (earnings multiple is price divided by seller’s discretionary earnings). The rate starts at the SBA ceiling for the loan size at prime of 7.00% (October 2026); edit it to your quote. Debt service coverage here is SDE minus the salary you need, divided by a year of loan payments; lenders use the last tax year or a two-year average, not projections. Estimate only, not an appraisal. Nothing you type leaves your browser.
How to calculate EBITDA
EBITDA is earnings before interest, taxes, depreciation and amortization. From a tax return or profit and loss statement:
- Start with net profit before income tax.
- Add back interest on business debt, including any merchant cash advance fees booked as interest.
- Add back depreciation and amortization, which are accounting entries, not cash spent this year.
- For adjusted EBITDA, add back one-time costs (a lawsuit, a move) and personal expenses paid by the business. Buyers will ask for receipts for every add-back.
Example: $60,000 profit + $5,000 interest + $10,000 depreciation + $5,000 one-time costs = $80,000 adjusted EBITDA.
SDE: the number small business buyers use
Seller’s discretionary earnings is EBITDA plus one owner’s salary and benefits. In the example, $80,000 + $80,000 of owner pay = $160,000 SDE, close to the $155,921 median cash flow of businesses sold in the second quarter of 2026 (BizBuySell via Small Business Trends). A buyer who will run the business pays for SDE. A larger company with a hired manager is priced on EBITDA, at higher multiples.
How to calculate revenue
Gross revenue is the total of everything sold or billed in the period: units times price, plus service and delivery fees. Net revenue subtracts returns, refunds, discounts and chargebacks. For a valuation, use the last twelve months or the last tax year, and leave out sales tax collected, which you hold for New York State and the city, and tips passed through to staff.
Revenue multiples are a rough cross-check for small businesses. Two restaurants with the same sales can be worth very different amounts if one keeps 4% and the other 12%.
Buying a business in NYC with an SBA loan: the rules since October 1, 2026
The SBA rewrote its change of ownership rules in SOP 50 10 8.1, which applies to 7(a) loans approved on or after October 1, 2026 (Starfield and Smith). For a buyer acquiring a business they do not already own:
- A business valuation is required on every change of ownership, at any size.
- Equity injection of at least 10% of total project cost. Seller notes on full standby and money from minority investors can cover no more than half of it.
- Debt service coverage of 1.25, measured on the last fiscal year or a two-year average. Projections do not count.
- A quality of earnings report when the price, excluding owner-occupied real estate, is $3 million or more.
- Maturity of up to ten years, and 7(a) Small loans can no longer be used for acquisitions.
To see which banks make acquisition-sized SBA loans in your borough and industry, use the NYC SBA lender finder, and compare rates in 7,597 NYC SBA loans by borough.
New York steps that change what you pay
- Bulk sale notice. A buyer of a business that collects sales tax must file Form AU-196.10 with the Tax Department at least 10 days before paying for or taking possession of the assets. Skip it and you can become liable for the seller’s unpaid sales tax (NYS Tax Department).
- Liens on the seller’s sales. If the seller took a merchant cash advance, a funder probably filed a UCC lien on the business’s receivables. Search the filings and get releases at closing; see UCC liens in New York.
- The lease. In New York City, the lease is often worth as much as the business. Check the years left, the assignment clause and any personal guaranty you will be asked to sign; the retail financing guide covers lease guaranties and the commercial rent tax.
- Licenses that do not transfer. A liquor license does not pass to a buyer; you apply to the State Liquor Authority, which can take months. See restaurant financing in NYC.
Selling: what raises your multiple
Buyers pay above the industry average for clean monthly books that match the tax returns, revenue that does not depend on the owner, recurring contracts, a long lease and no outstanding advances. Pull the documents buyers and lenders request together early with the due diligence checklist for NYC small businesses.
Where to go next
Frequently asked questions
How do you calculate the value of a small business?
Most small businesses are priced as a multiple of seller’s discretionary earnings (SDE): profit before tax, plus the owner’s salary and benefits, interest, depreciation and one-time costs. Multiply SDE by the multiple for your industry; across all sectors, BizBuySell’s five-year average is 2.58 and the second quarter of 2026 averaged 2.7.
What multiple do small businesses sell for?
Businesses sold through BizBuySell averaged 2.7 times cash flow and 0.7 times revenue in the second quarter of 2026, across 2,117 sales with a median price of $349,250. By sector, five-year averages run from 1.95 times for transportation and storage to 3.28 times for online and technology businesses.
How do you calculate EBITDA?
Start with net profit before tax, then add back interest, depreciation and amortization. Adjusted EBITDA also adds one-time or personal expenses run through the business. $60,000 of profit plus $5,000 of interest, $10,000 of depreciation and $5,000 of one-time costs is $80,000 of adjusted EBITDA.
What is the difference between SDE and EBITDA?
SDE is EBITDA plus one owner’s salary and benefits. It is used for owner-operated businesses, where the buyer will replace the owner’s job. EBITDA is used for larger companies that pay a manager, usually once earnings pass about $1 million.
How do you calculate revenue?
Gross revenue is everything the business billed or sold in the period: units sold times price, plus service fees. Net revenue subtracts returns, refunds, discounts and allowances. Sales tax you collect is not revenue; it belongs to New York State and the city.
Does the SBA require a business valuation to buy a business?
Yes. Under SOP 50 10 8.1, which applies to SBA loans approved from October 1, 2026, every 7(a) change of ownership needs a business valuation, and purchases of $3 million or more also need a quality of earnings report.
How much do I need to put down to buy a business with an SBA loan?
At least 10% of the total project cost, which includes closing costs and working capital, not only the price. A seller note can count for up to half of that 10% only if it is on full standby, with no payments, for the life of the SBA loan.
Buying a business in New York City? Send one short request and a funding partner will contact you about acquisition financing. This is a request for information, not an application, and approval is never guaranteed. We may be paid when you submit a request; see how this site is funded.
General information, not an appraisal or legal, tax or investment advice. Sale multiples are averages; a qualified business appraiser values a specific company.