Free tool · Cash-on-cash
Cash-on-Cash Return Calculator
See your pre-tax return on the cash you put into a business acquisition, after the loan is paid. Enter the price, down payment, financing, and cash flow.
Cash-on-cash is your pre-tax return on the cash you put in (the down payment), after the loan is paid each year. A negative number means debt service is eating all the cash flow.
Why buyers watch cash-on-cash return
When you finance an acquisition, you only put in the down payment — but you keep all the cash flow left after the loan. Cash-on-cash return measures that: the annual pre-tax cash flow after debt service, divided by the cash you invested. It's the number that tells you how hard your down payment is working in year one.
How to use this calculator
Enter the purchase price, down payment, loan terms, and the business's annual cash flow (SDE). The calculator shows your cash-on-cash return, the cash flow left after debt, and the annual debt service. For more, see our guides on buying an existing business and using an SBA loan to buy a business.
Frequently asked questions
Cash-on-cash return is your annual pre-tax cash flow after loan payments, divided by the cash you invested (usually the down payment). It measures the actual return on the money you put in, not the full purchase price.
Business buyers often target a cash-on-cash return well above what stocks or real estate yield — frequently 20% or more — because operating a business carries more risk and work. What's 'good' depends on the industry, growth, and how much of the price is financed.
ROI usually measures return on the total investment or includes eventual sale proceeds. Cash-on-cash isolates the annual cash return on just the cash you put in, which is what most acquisition buyers watch in year one.
No. This is a pre-tax figure. Your after-tax return depends on entity structure, depreciation, and your tax situation, so confirm the numbers with your accountant.
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