Free calculator
Cash to close calculator
- Equity injection
- —
- Transaction costs
- —
- Working capital
- —
- Reserve
- —
- Cash you actually need
- —
- Above the down payment alone
- —
Arithmetic on figures you supply. Professional fees and licence costs vary widely by deal and by state — get quotes rather than accepting a default. It does not model what your lender will let you finance versus what you must fund yourself; ask them.
Why the down payment is the wrong number to budget
Lenders quote the equity injection because that is the number relevant to them. It is not the number relevant to you, because three other calls on your cash land in the same week and none of them is optional.
- Transaction costs. Your attorney, your CPA or quality-of-earnings provider, lender and closing fees, and every licence or permit that has to be re-issued in your name. Get quotes; these vary more than any other line here.
- Working capital. The business needs stock, payroll and float before its own cash starts arriving. If your purchase agreement has a working-capital target the seller delivers, that reduces this line — see the working capital calculator.
- Reserve. The first quarter under new ownership is the least predictable one you will have. A business that would comfortably fund itself in year two can still run out of cash in month four.
The reserve is the line people delete
It is the easiest to argue away, because it funds nothing visible. It is also what stands between a slow first quarter and a distressed sale. When the deal is tight, the honest move is to reduce the price or extend the amortisation — not to delete the cushion and hope.
If the total here exceeds what you have, the deal is not necessarily dead. More seller financing, a longer term, or a lower price all reduce it. What does not work is arriving at closing with the injection and nothing else, which is the failure this tool exists to prevent.
Frequently asked questions
Is the down payment really only part of what I need?
On most small acquisitions it is roughly half to two-thirds of the total cash requirement. The rest is transaction costs, day-one working capital and a reserve. Buyers who model only the injection are the ones who close successfully and then run out of money in month four.
Can any of this be financed rather than paid in cash?
Sometimes. Some lenders will finance a portion of closing costs or include working capital in the loan, which changes the split between what you borrow and what you fund. It also raises your debt service, so run the result through the affordability calculator before assuming it helps.
How big should the reserve be?
It depends entirely on how volatile the business is and how quickly you expect to understand it. Three months of fixed costs is a common starting point rather than a rule. A seasonal business bought at the wrong point in its cycle needs considerably more.
What if the seller is delivering working capital at closing?
Then reduce that line to the shortfall rather than the full requirement. That is precisely what a working-capital target is for, and it is why the target belongs in the letter of intent rather than being settled late.
Educational only — not a valuation, a loan pre-approval, or a lender's number. Confirm specific rules, rates, and forms with the relevant New York State agency, attorney, CPA, lender, or insurer before acting. The formulas behind this tool are documented on the methodology page.