Deal Recon Kit by The Morning Deal

Deal Recon Kit

Five tools to read a deal before it reads you

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DEAL RECON KIT - by The Morning Deal

Buy Box Builder

Size your SBA 7(a) buy box in 60 seconds

Enter your cash, your target income, and where you will work. Get the largest deal your cash can actually fund, the price and SDE ranges to hunt in, and an industry shortlist with the hard exclusions already stripped out.

Buyer Profile

The real, non-borrowed cash you can put toward buying a business: savings, brokerage, money you can pull from retirement, minus anything you need to live on. It is not a loan and not borrowed money. Example: you have 200,000 dollars in savings and investments you are willing to use, so you enter 200000.
$
What you want to clear each year as the owner who runs the business, after the SBA loan payment is made. Think of it as the salary plus profit you take home. Example: you want to make 120,000 dollars a year running the business, so you enter 120000.
/ yr
The city or area you live in now. It only labels your buy box and frames the search area; nothing is looked up online. Example: type Austin TX or Tampa Bay.
How far you are willing to drive from home to run a business in person, in hours one way. For a business you must be physically present at, anything past about 5 hours is impractical. Example: if you will drive up to 2 hours, enter 2.
hrs
Choose Yes if you would move to a new area for the right business. Yes opens up the whole country and the drive-time limit stops mattering for in-person businesses. Example: pick No if you must stay near home.
The kind of business you would prefer to own, usually based on what you know or can learn. Pick Open to anything if you have no preference. Example: a former operations manager might pick B2B and professional services; pick Open to anything to see the full shortlist.
The cash cushion you keep AFTER closing to cover the first slow months, shown as a percent of the total cost of the deal. SBA lenders expect 10 to 20 percent set aside. Example: leave it at 10 for a steady business, raise it toward 20 for a riskier one.
%
The base interest rate banks build SBA loan rates on, published by the Wall Street Journal. You can leave the default unless you know today's number. Example: if Prime is 7.5 percent, leave 7.5.
%
The extra interest the SBA lender adds on top of the Prime rate, in percent. Your actual loan rate is Prime plus this markup. Most SBA 7(a) deals land near 2.0. Example: leave 2.0, so at 7.5 Prime your modeled rate is 9.5 percent.
%

Your Buy Box

Fill in your cash and target income, then click Build My Buy Box.