Enter realistic asking price, buyer cash contribution, interest rate, and amortization assumptions.
Last updated: September 2026
How financing changes buyer cash flow and purchase benchmarks.
Financing changes debt service, Actual DSCR, Cash on Cash, and before- and after-estimated-tax buyer cash flow. It can also change the NIAT-Preserving Purchase Benchmark, but it does not change selected-method Indicative Valuation or Equivalent Capital At Comparison Yield.
How financing changes the result
Using the same fictional business as the operating-yield versus cash-flow guide: a $600,000 loan at 9% over 10 years has an approximate $7,600 monthly debt payment. With $15,000 of monthly operating earnings, before-estimated-tax buyer cash flow is about $7,400 and Actual DSCR is about 1.97x.
Higher-rate case: keeping principal and term the same while raising the rate increases debt service, which lowers DSCR and buyer cash flow. Longer-term case: spreading principal over more years lowers the payment but keeps debt outstanding longer. Higher-contribution case: adding buyer cash reduces principal and payment, but increases the cash committed to the purchase.
Amortization is the schedule for repaying principal over time. Debt service is the loan payment. Actual DSCR is operating earnings divided by debt service. After-estimated-tax cash flow is what remains after financing and estimated tax.
Three price contexts answer different questions
Changing the loan terms changes debt service and buyer cash flow. It does not change operating yield or the selected-method valuation when the operating figures, asking price and valuation assumptions stay the same. The NIAT-Preserving Purchase Benchmark also depends on financing and the saved cash-flow target.
How to review financing
Review debt service and Actual DSCR; no debt makes Actual DSCR not applicable.
Review Cash on Cash alongside monthly cash flow, and compare cash flow and loan coverage with the targets set for the analysis.
Keep the NIAT-preserving benchmark separate from the comparison-yield benchmark and Indicative Valuation.
Compare saved scenarios without changing the baseline.