Reconcile sources and uses
List purchase consideration, debt repaid at closing, transaction expenses, initial working capital and planned post-close investment. Then identify buyer cash, senior finance, seller finance and other confirmed sources. Keep proposed sources separate from committed ones. A purchase price alone can understate the cash needed to close and operate the business after the transaction.
Separate historical results from adjustments
Reconcile reported operations to proposed adjustments and the post-close forecast. Identify owner compensation, replacement management, exceptional expenses and costs that continue after closing. An attractive adjusted earnings figure is not automatically cash available for debt service. Appropriate accounting and transaction advisers must review the records; the calculator does not validate financial statements or seller representations.
Model the transition period
Consider timing changes in receivables, supplier terms, payroll and customer retention after ownership changes. Initial working capital can be consumed before the projected steady-state result is achieved. Keep transition cash and transaction expenses visible instead of assuming that all historical receipts transfer immediately and unchanged. A loan-payment estimate alone does not establish a funded operating runway.
Show every debt layer
Identify senior installments, seller-note payments, deferred purchase obligations and any balloon or contingent consideration. Obtain the actual priority, payment-blocking and consent provisions where facilities interact. Do not count a deferred obligation as permanently free equity. A DSCR illustration is meaningful only when the entered debt service reflects the obligations relevant to the comparison.
Use coverage with an explicit definition
The DSCR tool divides entered annual income by entered annual debt service. For an acquisition, define the sustainable cash measure with the appropriate advisers rather than automatically substituting a property NOI definition. Keep required operating costs and owner or management needs visible. The result does not establish a lender’s underwriting treatment or an approval threshold.
Keep program financing separate
SBA identifies changes of ownership among potential 7(a) uses, subject to lender and program requirements. That is an official comparison resource rather than a private provider quote or confirmation that this transaction qualifies. Do not assume the purchase structure, seller note or equity contribution meets current rules without a confirmed lender review.
Stress a slower handover
Test lower early receipts, extra management cost or delayed integration using your own stated assumptions. Show how debt payments and operating cash interact during that period. Keep any refinancing of seller debt or a balloon as a separate prospective event. A model cannot guarantee business performance, customer retention or a later lender’s willingness to refinance.
Ask MITEY about the capital structure
Describe the broad acquisition stage, financing need and comparison you want to understand. Leave the seller’s identity, confidential financial statements and sensitive deal records outside the public form. MITEY retains the relationship, with any provider introduction conditional on availability and permission. An enquiry is not an acquisition commitment, loan application or guaranteed offer.