This $1.2M SaaS / Software Pays $219,921/Year After Debt
Strong margins, fair price, and real cash flow. This is what a solid deal actually looks like.
This is a saas / software business listed at $1.2M, generating $695,299 in annual revenue and $403,205 in seller's discretionary earnings. At a 2.98x cash flow multiple, the asking price comes in below the industry average of 3.40x for saas / software businesses. The profit margin is 58%, above the 35% industry average.
We ran this deal through the DealScore Pro Bulletproof Calculator to see how it holds up across all five scoring criteria. Here is the full breakdown.
Deal Snapshot
The deal snapshot tells a clean story. Revenue of $695,299 with a 58% margin means the business is generating real cash flow, not just top-line vanity. The 2.98x multiple is favorable, coming in below the industry average.
Financing Overview
Using the standard 80/10/10 SBA deal structure (80% SBA 7(a) loan, 10% seller financing, 10% buyer down payment), here is what this acquisition looks like when financed.
Why the Numbers Matter
The headline number most buyers fixate on is the asking price. But the asking price alone tells you almost nothing about whether a deal is worth doing. What matters is what happens after you finance it.
The post-debt cash flow of $219,921 per year is the real number. That is what you take home after every loan payment, every month, for the life of the loan. On a $120,000 cash investment, that is a strong return, and it is well above the $100K minimum threshold that the Bulletproof standard requires.
The DSCR of 2.20x means the business generates $2.20 for every $1 of annual debt payment. SBA lenders require a minimum of 1.25x. The Bulletproof standard requires 2.0x. This deal clears both with room to spare, which means you have a real safety margin if revenue softens or costs spike unexpectedly.
The stress test is where many deals that look good on paper fall apart. We model a 20% drop in revenue and check whether the business can still cover all debt obligations. This deal passes. Even at $556,239 in revenue (down from $695,299), the cash flow still services the debt. That is the kind of resilience you want in a financed acquisition.
Industry Context
📈 How This Deal Compares to the SaaS / Software Industry
SaaS / Software is one of the more stable acquisition targets. Demand tends to be recurring and local, and the skill requirements are well-defined. Lenders see saas / software as a relatively safer bet, with an SBA default rate of 5.8% versus the 16.8% all-industry average.
The saas / software industry carries a lower-than-average SBA default rate at 5.8%, compared to the all-industry average of 16.8%. Combined with a deal that performs well on the fundamentals, this is the profile lenders like to fund.
Strengths and Risks
✓ What Works
- Fair pricing at 2.98x earnings
- Strong post-debt cash flow of $219,921 per year
- Adequate working capital reserves
- Survives a 20% revenue decline stress test
⚠ Watch Out For
- DSCR of 2.20x is below the safety threshold
- Key-person risk: verify the current owner's role in daily operations
- Lease terms and renewal risk
Who This Deal Is For
Best fit for:
Owner-operators with industry experience or management background who want a business that cash flows from day one.
First-time buyers looking for a straightforward acquisition with solid fundamentals.
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Frequently Asked Questions
Is $1.2M a fair price for a saas / software business?
At 2.98x seller's discretionary earnings, this asking price is below the industry average multiple of 3.40x for saas / software businesses. Deals priced below 2.90x are generally considered favorable for buyers, while anything above 4.10x starts to look expensive.
What is a good profit margin for a saas / software business?
The industry average profit margin for saas / software businesses is approximately 35%. This listing operates at a 58% margin, which is above average and suggests the business is managing costs effectively. Margins above 30% are generally considered healthy in the saas / software industry.
Can I buy a saas / software business with an SBA loan?
Yes. SaaS / Software businesses are commonly financed through SBA 7(a) loans using an 80/10/10 structure: 80% SBA loan, 10% seller financing, and 10% buyer down payment. For this $1.2M deal, that means approximately $120,000 in cash at closing. SBA lenders require a minimum DSCR of 1.25x, but conservative buyers target 2.0x or higher. This deal's 2.20x DSCR comfortably clears both thresholds.
How much do saas / software business owners actually make?
Owner earnings vary widely based on revenue, pricing, and operational involvement. This saas / software business generates $403,205 in seller's discretionary earnings (SDE) before debt service. After SBA financing under the 80/10/10 structure, the buyer would take home approximately $219,921 per year. That post-debt figure is the number that actually matters for a financed acquisition, because it reflects what ends up in your pocket after every loan payment is made.