Deal Comparer
Compare Two Deals
Two listings rarely differ only in price. Put both on one financing basis, at the same rate and the same owner salary, and the coverage each one leaves you is the comparison worth making. A cheaper deal that services its debt on a thinner margin is the more expensive one.
Deal A
Deal B
Both deals are read at 90% financed over 10 years, the term 13 CFR 120.212 allows for what the loan buys; coverage is computed after your salary.
Deal A · Multiple
3.10x
Price over SDE
Deal A · Debt Service
$656,687
On a $4,320,000 loan, yearly
Deal A · Coverage After Salary
2.21x
$793,313 cushion a year
Deal B · Multiple
2.88x
Price over SDE
Deal B · Debt Service
$547,239
On a $3,600,000 loan, yearly
Deal B · Coverage After Salary
2.36x
$742,761 cushion a year
The Reading
Both cover. Deal A leaves the wider cushion after salary and debt service, by about $50,552 a year. The cushion is what survives a bad quarter; the multiple is what you brag about.
A reading is a screen, not diligence: the winner still earns the full underwrite.