How to buy a small business with no money is the question people ask when they have the skill to run a business and not the cash to buy one, and the trap in it is buying a job instead. A stack that funds the whole price from a lender and a seller note can leave the business paying its notes and nothing to the buyer. This page works the stack with the buyer's own pay as a line in it, because a purchase that cannot pay the buyer is not a purchase worth making at any leverage.
Put your own pay in before the debt
The calculator asks for the buyer's own pay as an input, $90,000 on the worked example, and subtracts it from the seller's discretionary earnings before testing the debt. That is the order a lender uses and the order the buyer should insist on. $180,000 of earnings less $90,000 of pay leaves $90,000 for the notes.
Then leverage up and watch the coverage
With the bank at 80% and the seller at 10% the example's notes cost $68,731.68 a year and coverage is 131%. Push the seller note to 20% so the buyer's cash on the price is zero and the payments rise to $79,171.32, coverage 114%, cash left $10,828.68. The buyer has kept their pay but lost most of the cushion, which is the honest picture of no money down.
Decide what you are buying
If the coverage only reaches 100% when the buyer's pay is cut, the stack is buying a job with a debt attached. The SBA business guide's advice to investigate thoroughly applies to the buyer's own position as much as the seller's books: know before the offer what the business pays you in year one, and walk if the answer is nothing.
Questions people ask about how to buy a small business with no money
What is a reasonable pay to enter?
What you would earn doing the same work for someone else. Entering less flatters the coverage and hides the cost of the purchase.
Can working capital come from the lender?
Sometimes, inside the note. It raises the payment; the sheet shows by how much if you add it to the price funded.
What does Pro keep?
Each version of the stack you tried, with the pay and coverage that went with it, beside the target and the offer, for $14 a month.