Free tool
What can I actually afford?
The first question every buyer asks, and the one most calculators answer badly. What you can afford is bounded by two separate things: the deposit you hold, and what the business will earn once you have paid yourself. This works out both, and tells you which one is holding you back.
Indicative price you could look at
725,000 dollars
$290,000 of your own money and $435,000 borrowed, at 60% of the price.
Your deposit is what limits you, not the business.
The sort of business you are looking at would service more debt than your deposit lets you borrow. More equity, or a vendor contribution to part of the price, moves this number further than finding a better business would.
Ceiling on your deposit
$725,000
At 60% funded.
Ceiling on the earnings
$1,093,000
At 1.50x cover.
- Earnings after paying yourself
- $190,000
- Deposit going into the purchase
- $290,000
- Annual debt service, at the assessed rate
- $68,550
- Earnings the debt requires
- $102,825
Indicative only, on the figures you entered, and before stamp duty, legal costs and professional fees. Found something you are seriously considering? The First Look tells you what the asking price implies before you spend anything on diligence.
The method
Two ceilings, and the lower one is your answer.
For scale, the average asking price across listings on Bsale was around $660,000 in December 2025. Most first purchases sit well below that.
| Step | How it is worked out | Why it matters |
|---|---|---|
| Your usable equity | Cash plus the property equity you would genuinely put in, less the working capital you hold back. | Working capital is not deposit. Spending it on the purchase is the most common way a funded deal still fails in month three. |
| Earnings after paying yourself | The target's adjusted earnings, less what it would cost to hire someone to do your job. | Whatever is left is what services debt. Skipping this step is what makes most first estimates roughly double what a lender will agree to. |
| The ceiling on your deposit | Your deposit divided by the share you have to fund yourself. At 60% funded, a $290,000 deposit buys about $725,000. | Lenders fund a proportion of the price, and the rest has to come from you. |
| The ceiling on the earnings | The largest facility those earnings service at your target cover ratio, plus your deposit. | A big deposit does not help if the business cannot carry the debt it leaves you with. |
| Which one binds | The lower of the two ceilings is the answer, and the calculator names which one it is. | It decides what to do next: raise more deposit, or look at businesses that earn more. Those are very different searches. |
Your usable equity
- How it is worked out
- Cash plus the property equity you would genuinely put in, less the working capital you hold back.
- Why it matters
- Working capital is not deposit. Spending it on the purchase is the most common way a funded deal still fails in month three.
Earnings after paying yourself
- How it is worked out
- The target's adjusted earnings, less what it would cost to hire someone to do your job.
- Why it matters
- Whatever is left is what services debt. Skipping this step is what makes most first estimates roughly double what a lender will agree to.
The ceiling on your deposit
- How it is worked out
- Your deposit divided by the share you have to fund yourself. At 60% funded, a $290,000 deposit buys about $725,000.
- Why it matters
- Lenders fund a proportion of the price, and the rest has to come from you.
The ceiling on the earnings
- How it is worked out
- The largest facility those earnings service at your target cover ratio, plus your deposit.
- Why it matters
- A big deposit does not help if the business cannot carry the debt it leaves you with.
Which one binds
- How it is worked out
- The lower of the two ceilings is the answer, and the calculator names which one it is.
- Why it matters
- It decides what to do next: raise more deposit, or look at businesses that earn more. Those are very different searches.
A worked example
When the deposit is what holds you back.
A buyer with $120,000 in cash, no property equity to use, holding $40,000 back for working capital, looking at businesses earning $400,000 before they pay themselves.
Your deposit is what limits you, not the business.
The sort of business you are looking at would service more debt than your deposit lets you borrow. More equity, or a vendor contribution to part of the price, moves this number further than finding a better business would.
Indicative price
$200,000
The lower of the two ceilings.
Ceiling on the deposit
$200,000
What the deposit stretches to.
Ceiling on the earnings
$1,150,000
What the business would service.
Borrowing
$120,000
60% of the price.
The businesses this buyer is looking at would comfortably service well over a million dollars of price. Their deposit stops them at $200,000. Saving harder, or bringing in equity, moves this buyer far further than finding a better business would, and knowing that before spending six months looking is the entire point of the exercise.
What this does not cover
- Stamp duty, legal costs and professional fees, which are on top
- Any individual lender's policy, appetite or credit rules
- Whether the earnings you typed in would survive review
- Security, guarantees or what a lender would want over your home
- Goodwill-heavy sectors, where the funded share is often far lower
- Your own tax position and the structure you should buy in
Found one worth a serious look?
The First Look reads the advertisement or information memorandum the way a credit team would, and tells you whether it is worth paying for diligence. $295, 2 business days, credited back if you proceed.
Still working out whether any of this is for you? The first-timer's guide walks through the whole thing in order.
Common questions
Because somebody has to do the job. If you are going to work in the business, part of what it earns is your wage rather than a return on the money you put in, and it is not available to service debt. Leaving that out is the single most common reason a buyer's own estimate is roughly double what a lender will agree to.
Commonly 50% to 70% of a business purchase, so expect to contribute 30% to 50% yourself, plus working capital and costs. It goes lower where the price is mostly goodwill, and it can go higher, sometimes to the whole price, where you are offering property as security. The calculator lets you move that number because it genuinely varies.
Because two separate things can stop you. Your deposit caps the price because a lender only funds part of it. The earnings cap the price because the debt has to be serviced out of them. Whichever is lower is your real answer, and knowing which one it is tells you what to do: raise more equity, or look at businesses that earn more.
As a rule of thumb, 60 to 90 days of operating costs, available from day one and not spent on the purchase. Wages, rent, stock and the tax that falls due do not wait for the business to settle in. Buyers who put every dollar into the price are the ones who get into trouble in the first quarter, with a perfectly good business.
No, and nothing here is an offer of finance. It is arithmetic on the figures you typed in, and it assumes they are right. What it gives you is a sensible range to search in, which stops you spending months looking at businesses you were never going to be able to fund.
The First Look reads the advertisement or information memorandum the way a credit team would and tells you what the asking price implies, what to ask, and whether it is worth paying for diligence. It is $295 with a two business day turnaround, and it is credited in full against a due diligence engagement on the same business.
General information only. Not credit advice, not a credit assessment, and not an offer of finance. Lending proportions and cover ratios shown are market observation, not any lender's policy. Andorra Advisory Group does not arrange credit and is not a credit representative.