The cash you need on closing day.

At least ten percent, and the ten percent is not measured against the asking price. The SBA requires ten percent of the total project cost, which is every cost required to complete the change of ownership: the price, the lender's fees, the guaranty fee, your lawyer and accountant, and the cash the business needs on hand. On a $500,000 business with about $64,000 of those costs, what you have to put in is roughly $56,400 rather than $50,000. Ten percent is also a floor rather than the number. Lenders routinely ask for more where you have no experience in the industry, where the operating history is thin, or where most of the price is for the name and the customers rather than for trucks, stock or a building.

More than the down payment, and the gap is the thing nobody quotes. On top of what you put into the deal you need a household reserve, because the business will not pay you properly for months. We use six months of what you spend at home, which is not an SBA rule but is the single most useful line in the whole calculation. Most first purchases that fall over at the table fall over on this.

Partly, and only one way. A seller note counts toward the money you have to put in only if the seller takes no payments at all for the life of the SBA loan, which is usually ten years. Not deferred, not interest only, nothing. It also counts for at most half of what you owe. That sentence is what makes most sellers say no, so ask early. There is a workaround nobody volunteers: one note on full standby counts toward your own money, and a second note on a shorter standby sits outside that calculation entirely. Ask for both.

It is a real fee, it is charged on the guaranteed portion of the loan rather than the whole loan, and it is usually rolled into the loan rather than paid in cash. Under the SBA's standard chart it is 2.0 percent at or below $150,000, 3.0 percent from $150,001 to $700,000, and above that 3.5 percent of the first million guaranteed and 3.75 percent of the rest. The SBA guarantees 85 percent up to $150,000 and 75 percent above it, so a $1,200,000 loan has a $900,000 guaranteed portion and a $31,500 fee.

The most a lender may charge depends on the size of the loan. On a loan over $350,000 it is Prime plus 3.0 percent, so with Prime at 7.00 percent that is a 10.00 percent ceiling. Smaller loans may be charged more: up to Prime plus 4.5 at $350,000 and below, and up to Prime plus 6.5 on the smallest loans. Acquisition loans are typically written between Prime plus 2.25 and Prime plus 3.0. Treat the ceiling as the number to plan against, because a payment that works at the ceiling works anywhere. Any calculator that does not tell you the date it last checked Prime is telling you about a different year.

Yes, if you repay it from income that does not come from the business. A home equity line or a personal loan counts as your own money when your other income, a spouse's paycheck or rental income for example, can carry the payments. Your salary from the business you are buying does not count. A retirement rollover into the business is also allowed, with its own paperwork. Every dollar also has to be seasoned and shown: the lender wants at least a month of statements proving where it came from, plus proof it moved into the deal. A gift counts too, but a gift letter alone is not proof; the lender wants to see the money move. One more limit is worth knowing before you call anyone: money from the seller or from a small outside investor can cover at most half of what you put in, and the seller's share counts only if they take no payments at all until the bank is paid off.

Forty five to ninety days once you have agreed on a deal, not four weeks. Finding the right business takes six to eighteen months before that. Plan your last day at work around the long end of both. The lender will also pull the seller's tax transcripts from the IRS, which adds time and ends deals where the returns do not match the profit and loss statement the broker sent you.

Hazard insurance, and often life insurance. On most loans over $50,000, everything pledged as collateral has to be insured for what it would cost to replace. On a loan over $350,000, life insurance is also required when the business depends on you and the loan is not fully covered by collateral, for the amount the collateral falls short, and for an older buyer that policy can take time to get. There is no SBA penalty for paying the loan off early when its term is under fifteen years, and the business part of a purchase loan runs ten years at most. If a building is in the deal and the loan runs fifteen years or longer, paying off more than a quarter of it in one of the first three years costs a fee. And if you are buying part of a business rather than all of it, you are buying a share of the company, stock or membership units, and the owner who stays has to personally guarantee your loan.