Provenance
Sources and limits
Two kinds of number appear in this application, and they are not equivalent. They are given different treatments on screen so you can tell them apart at a glance.
Binding figures
Binding figures come from primary documents — SBA SOP 50 10 8 (effective 2025-06-01), SOP 50 10 8.1 (effective 2026-10-01) and IRS material. They constrain the deal, they are exact, and they are not estimates.
- Debt service coverage floor1.15:1
- Global debt service coverage floor1.00:1
- Equity injection, complete change of ownership10% of total project cost
- Limited sources, including a seller noteNo more than 50% of the required injection
- Full standbyNo payments of principal or interest for the term of the 7(a) loan, documented on SBA Form 155.
- Business acquisition term120 months
- Real estate amortisationup to 300 months
SOP 50 10 8, effective 2025-06-01. SOP 50 10 8.1, effective 2026-10-01.
Soft figures — the sector multiples
Soft figures come from one market dataset and are comparative only. Nothing in the coverage arithmetic, the supported price, fragility or the structures depends on them. A thin benchmark does not weaken a coverage result.
What they are
- AggregationBizBuySell reported closed sales, trailing five years; current window Q3 2021 – Q2 2026, updated biannually
- MethodEach multiple is the reported sale price divided by the seller's discretionary earnings, averaged across the closed sales reported in the window.
- Dataset median sale price$340,000
- 80% of sales$50,000 – $2,000,000, the "main street" segment
- All-sector average earnings multiple2.58×
- All-sector average revenue multiple0.67×
BizBuySell: these figures "should not be relied upon to value a specific business."
The source refreshes twice a year; past 7 months from capture we say so beside the figures.
The five limits
- 1These are averages
No medians, no quartiles, no dispersion of any kind is published. Every benchmark here is a single reference point. It is never rendered as a range, a band, a confidence interval or an error bar, because that precision does not exist.
- 2Self-reported
The figures are as reported by the owners or brokers closing the listing, so the dataset covers only businesses that were listed on BizBuySell, closed, and then reported. It is a sample with selection bias, not a census.
- 3The publisher is a marketplace
BizBuySell is a listings marketplace, not a neutral statistician, and has a commercial interest in the market appearing healthy.
- 4The window is trailing and lags
A five-year trailing window blends the 2021–22 peak with the present, and it refreshes only twice a year.
- 5Scope is $50,000 – $2,000,000
Above roughly $2M the market prices on EBITDA rather than SDE and these multiples do not apply, which is why the benchmark is suppressed above the band.
Why one source, and not another
BizBuySell is deliberately the only multiples source. The alternatives were checked and rejected, and this note exists so the research is not repeated.
Pepperdine Private Capital Markets Report — free and academic, but it is a cost-of-capital survey: required returns and lending benchmarks by capital type, not per-industry SDE multiples. Wrong shape.
IBBA / M&A Source Market Pulse — the right shape (Main Street $0–2M and Lower Middle Market $2M–50M, quarterly, roughly 300 advisors and about 203 closed transactions per quarter) with an openly published methodology, but the multiples themselves are withheld from the public releases. Access requires being a broker who submits deals.
DealStats / BVR — the licensed option, $1,499 a year or a $529 day pass, but the standard subscription explicitly excludes populating the data into a commercial or client-facing application. That requires a separate data licensing agreement at an unpublished price.