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How can I determine how much of a business I can afford to buy?

I am seeking to purchase an existing and established small business in the near future. In order to narrow my search, how can I determine how much I can afford if I have "x" amount available in assets for a down payment? I have asked my SBA advisor, accountant, and prospective brokers and lenders, but I cannot seem to obtain a straight answer. I do understand that each circumstance is unique (e.g. seller financing), but how can I cut to the chase so I can avoid wasting both time and money during my search that is unrealistic? Is there a safe norm like 20% of purchase price? I would love to establish a range of how much I can afford. Please help! Sincerely, frustrated.

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Much appreciated, Don. Best response I have received to-date.

Sep 23, 2011

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