A deal box is the maximum price and financing structure a specific deal can support while still clearing lender coverage (DSCR) and hitting the buyer's target return. Where the buy box screens candidates, the deal box sets the ceiling on price and terms.
Worked example
| Line | Value |
|---|---|
| Cash flow available for debt | $260,000 |
| Min. DSCR the lender requires | 1.25× |
| Max annual debt service | $208,000 |
| Supportable SBA loan (~10-yr) | ~$1,000,000 |
| Deal-box ceiling (loan + injection) | ~3× SDE (~$1.05M) |
If the seller wants more than the box allows, a seller note on standby can bridge the gap without breaking coverage.
Why it matters when buying a business
The deal box keeps emotion out of negotiation. Anchoring to what the DSCR and your return actually permit stops you from overpaying, and it tells you instantly whether a stretch price needs seller financing or a walk-away. Combine it with your buy box and a clear view of multiple arbitrage if you plan to grow.
