The bank approved the loan at 1.56 times. In its first year the business covered its own debt 0.96 times.
Value it, finance it with an SBA loan and seller notes, and close without overpaying.
Julian R. Sterling
These are the companion files of Buying a Small Business by Julian R. Sterling.The book on Amazon →
The two Excel workbooks that produced every figure in the book, re-verified and corrected where they were wrong.
Units are thousands of dollars; blue cells are inputs, black cells are formulas, and each workbook ends with a
Check sheet setting the printed figure beside the live one: 122 controls in all, every one
green. Around them: the same two models with the inputs emptied, thirteen working documents to print, forty
questions that mark themselves, and three cases the book names and never takes to a number. Nothing is locked,
protected or watermarked.
Free to download. No sign-up, no email address, nothing to fill in.
Seven workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 24 September 2026.
Get an email if these files are corrected
Optional. When a workbook on this page is corrected or a new worked case goes up, readers on the list get one email, plus a short note when a new book comes out. The downloads do not need it.
Each has a Check sheet that puts every printed figure beside the live formula, and a Scenarios sheet that says
which single input reproduces each sensitivity in the book. No macros, no circular references, no external links.
Download these two67 KB
Deal A · Chapters 2 to 10, 13 to 15
Cedar Ridge Mechanical
An HVAC contractor listed at 3.21 million. The bridge from 917,000 of broker SDE to 676,000 of adjusted EBITDA; sources and uses with the valuation cap and the FY2027 guaranty fee solved in closed form, which fixes the loan at 2,340,000; ten years of operations with bonus depreciation and the 80 percent loss rule; the exit allocated by asset class. Revised: under the price-only reading of the valuation cap, with an appraisal below the price, the cap carried the fee on the uncapped loan and the loan ran past its own cap; at an appraisal of 2,300,000 the loan is 2,348,553, not 2,348,817. The shipped figures do not change. Sixty checks, among them the lender’s maximum price in closed form: 3,282,798.
A cleaning company whose largest customer, a hospital system, is 34 percent of revenue and about 77 percent of profit. Shipped at 1.59 million, just under the lender's maximum, so that you can watch it fail the book's own test in years 3 to 5. Type 34% into one cell to lose the hospital. Re-verified: the lender’s maximum is 1,595,346, and the book’s own test, cash coverage of 1.25 in the weakest of years 3 to 5, is met at 1,338,130. Sixty-two checks.
Tri-County cash coverage, years 3 to 5, at 1.59 million
1.10x to 1.12x
The same models, for your own deal
The two workbooks with their inputs emptied: 68 on Cedar Ridge’s Inputs sheet, 65 on Tri-County’s. The Check sheets count what is still missing and test what holds for any inputs.
Deals A and B · every sheet
Your business, your loan, your exit
The seller’s three years, the broker’s add-backs and the quality of earnings, the price and the working capital, the equity injection and the two seller notes, the SBA terms and the fee tiers, the tax elections, the exit and the stress switch, all emptied, with the same formulas behind them. Every sheet fills in once the last input is entered; the appraisal and the exit multiple may stay blank, as the book leaves them.
The book’s inputs are listed in a text file inside the archive. Type them back in and the book’s figures come back with them: a loan of 2,340,000, 1.56 and 0.96 in year 1, 1.10 to 1.12 at Tri-County.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Deals A and B · every chapter with a figure
Thirteen working documents
The add-back schedule, broker against quality of earnings, with the evidence that settles each line. The quality-of-earnings request list. The price in four multiples, beside the lender’s maximum and the book’s cash test. Sources and uses with the valuation cap read three ways. The guaranty fee and the loan that sizes itself, tier by tier. The seller notes read from both sides. Coverage year by year, the lender’s ratio beside the cash one. The allocation and the tax years. The stress pack. The customer concentration worksheet. The walk-away price, with the guarantee beside the return. The exit by asset class. Both fact patterns, with the order of work.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
Both deals · all parts of the book
Forty questions on the book
Seven on earnings and price, seven on sources and uses, seven on coverage and cash, six on tax and the exit, seven on Tri-County, and six on the three cases below. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for each answer.
New material, not a restatement. Three situations the book names and never takes to a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a checks sheet closes it. Type your own figures in and every finding recomputes.
Deal A · the exit and the guarantee · Case one
What the guarantee carries
Workbook A prints the 64.1 per cent return on 162,897 of cash beside the 2,340,000 the buyer personally guarantees, and stops there. At the book’s mildest shock, 10 per cent of revenue lost from year 2, the buyer puts in 273,206 of personal cash over five years just to keep paying. Liquidated at the end of year 3 (recoveries ADDED), the guarantee is called for 1,227,329 to 1,265,487 whatever the shock: the loss runs to 8.5 to 12.5 times the cash invested. The lender’s own test fails at a loss of 7.33 per cent.
Deal B · Chapters 3, 8 and 11 · Case two
The hospital, priced
At the entry multiple, 1,217,978 of the 1,590,000 is the hospital’s profit, and the price assumes it renews with certainty. Without it the business carries 373,273 at the lender’s 1.25. If it leaves at the year-2 renewal the buyer funds 738,112 over five years; at the book’s own buyer’s price of 1,338,000 still 531,029. An 80 per cent chance of renewal (ADDED) prices the business at 1,346,404, and bringing the lender back to 1.25 takes new revenue worth 95.8 per cent of the hospital’s.
Deal A · the seller notes · Case three
The seller notes, priced from both sides
At the seller’s discount rates (ADDED), the 2,600,000 headline is worth 2,533,642 in cash today. Paid that value in cash, with no notes, the buyer needs 313,759 at closing against 162,897, but covers year 1 at 1.04 instead of 0.96. The notes save the buyer 150,862 of cash and 193,642 of guaranteed debt, for 66,358 of the seller’s value: negotiate them and the price as one number.
an input, on the Inputs sheet only: you may edit these
Black text
a formula: do not overtype these
Yellow fill
an assumption that carries the answer
Check sheet
the printed figure beside the computed one, with a tolerance and an OK; in the blank set and the cases, each control states its own verdict and the file ends ALL OK
ADDED
a figure the book does not give, used in the cases and marked wherever it appears
Opening the files
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers; the PDF
prints on A4 or US Letter. They use no macros and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks
to update links on opening, decline: there are none.
What changed, and when
24 Sep 2026
Both workbooks re-verified, 122 checks. Under the price-only reading of the valuation cap, with an appraisal below the price, the loan is now solved with the fee on the capped loan: 2,348,553 at an appraisal of 2,300,000, not 2,348,817. Every figure the book prints is unchanged. Tolerances tightened to 0.0005 on ratios, and the lender’s maximum price added in closed form. Added: a blank set, thirteen working documents, forty questions that mark themselves, and three cases.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
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