Owner Add-Back Calculator
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From your P&L or tax return
Owner Compensation
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Market rate add-back: amounts above benchmark
Market rate (your trade):
Select trade
Owner Perks (Annual)
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Other Add-Backs
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Legal settlements, one-off consultants, equipment write-offs
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Amount above fair market rate for each family member's role
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SBA Loan DSCR Check (optional)
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Total annual loan payments — shows DSCR before and after add-backs
Your Results
Total Add-Backs
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Enter owner expenses above
Adjusted EBITDA / SDE
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Reported EBITDA + add-backs
Implied Business Value
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Based on EBITDA multiple ranges
DSCR with Add-Backs
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Enter debt service to calculate
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Build your full Loan Package →Owner Add-Backs — Answered
Common questions from trade owners before a loan or business sale.
What is an owner add-back for a small business?
An owner add-back is a personal expense run through the business that a new owner or lender would not incur. Common examples: owner salary above market rate, personal vehicle expenses, health insurance, family payroll above market, one-time legal or consulting fees, and personal expenses charged to the company. Add-backs increase Adjusted EBITDA (also called Seller's Discretionary Earnings), which improves SBA loan eligibility and business valuation.
What is the difference between SDE and Adjusted EBITDA?
SDE (Seller's Discretionary Earnings) includes the owner's entire salary in the add-back (EBITDA + full owner compensation). It's used for businesses valued under $5M where a single owner-operator runs the business. Adjusted EBITDA adds back only the above-market portion of owner salary — used for larger businesses ($5M+) that would hire a management team. For SBA loans, lenders use a DSCR calculation based on Adjusted EBITDA (add-backs minus a market-rate management fee).
What EBITDA multiple for HVAC or plumbing businesses?
$1M–$5M revenue: SDE multiples of 3.5×–5.5×. $5M–$15M revenue: Adjusted EBITDA multiples of 5×–7×. High end requires: documented recurring service contracts, multiple licensed technicians, strong online reputation, clean financials with proper add-back documentation. Low end: owner-dependent operations, one licensed person holding all credentials, no recurring revenue documentation.
How do add-backs affect my SBA DSCR?
DSCR = Adjusted EBITDA ÷ Annual Debt Service. More add-backs = higher Adjusted EBITDA = higher DSCR. Example: reported EBITDA $240K, add-backs $80K, debt service $240K. Reported DSCR = 1.00× (below SBA 1.25× threshold). Adjusted DSCR = 1.33× (eligible). The add-backs must be documented with tax returns and source records — SBA underwriters will verify.
What is market-rate owner compensation for trade businesses?
SBA lenders benchmark owner compensation against BLS data and comparable job postings. Typical ranges: HVAC $95K–$105K, Plumbing $90K–$100K, Electrical $90K–$100K, Roofing $85K–$95K, Landscaping $80K–$90K. Only salary above these benchmarks qualifies as an add-back. Document with your payroll records and a brief market comp justification — don't just pick a number.