BuyBox
The Sacred Text

The BRIT Score Methodology

How BuyBox quantifies acquisition risk across four dimensions — using the same financial logic as institutional buyers and the SBA 7(a) lenders who actually fund the deals.

Score Before You LOI

The spreadsheet era is over.

Most acquisition analysis happens in a 47-tab spreadsheet inherited from a CPA who learned Excel in 2003. The weights are arbitrary. The thresholds drift between deals. The buyer's cognitive bias — anchoring on the asking price, falling in love with the seller's story, ignoring the customer concentration buried on tab 19 — bleeds into every cell.

Two buyers analyzing the same deal arrive at two different verdicts. Neither can explain why. That is not analysis. That is vibes with formulas.

The BRIT Score replaces guesswork with a framework derived from SBA 7(a) lending standards — the same fundability tests every bank in the country runs before they wire the money. Standardized. Auditable. Repeatable across every deal in your pipeline.

The Four Dimensions

B · R · I · T

Every dimension is scored 1–5. Each has a clear measure, clear thresholds, and a clear reason it matters. No black boxes.

B
Dimension 1

Business Quality

What it measures

SDE margin as a percentage of revenue, modified by years in business.

Thresholds
  • 25%+Strong margin
  • 15–25%Moderate margin
  • <15%Weak margin
Modifier

Tenure modifier: businesses operating 10+ years receive a stability bonus. Under 3 years, a stability discount.

Why it matters

SDE margin is the single best proxy for operational efficiency and pricing power. Thin-margin businesses have no slack — one bad quarter and you can't service debt. Fat-margin businesses survive shocks.

R
Dimension 2

Risk / DSCR

What it measures

Debt Service Coverage Ratio against the financed SBA payment, plus top-customer concentration.

Formula
DSCR = SDE ÷ Annual Debt Service (SBA 7(a) payment)
Thresholds
  • 1.35x+Strong — comfortable cushion
  • 1.25–1.35xBorderline — meets SBA minimum
  • <1.25xFail — SBA will not finance
Modifier

Concentration penalty: any single customer above 40% of revenue applies a significant score reduction. The bank sees one customer leaving as a default event.

Why it matters

DSCR is the SBA's primary fundability gate. If your deal can't clear 1.25x at the bank's stress-tested payment, the deal does not exist — no matter how attractive the multiple looks.

I
Dimension 3

Income / Return

What it measures

Cash-on-Cash return on the 10% down payment after debt service.

Formula
CoC = (SDE − Annual Debt Service) ÷ Down Payment × 100
Thresholds
  • 25%+Exceptional
  • 15–25%Strong
  • 8–15%Acceptable
  • <8%Poor — equity earning less than the S&P
Why it matters

Cash-on-Cash tells you what your equity is actually earning, not what the business is making. A 5x SDE multiple sounds great until you realize your $200K down is yielding 6% — at which point you should have bought an index fund and a sandwich.

T
Dimension 4

Transferability

What it measures

Owner hours per week and reliance risk — how much of the business walks out the door at closing.

Thresholds
  • <20 hrs/wkLow risk — runs without owner
  • 20–40 hrs/wkModerate — needs transition plan
  • >40 hrs/wkHigh — key-man risk
Modifier

Digital premium: pure-digital businesses receive a +0.5 bonus. Lower workforce dependency, higher process documentation, easier handoff.

Why it matters

The number-one reason post-close acquisitions fail is owner dependency. If the seller IS the business, you didn't buy a business — you bought a job, at a 4x multiple, with debt.

The Composite

One score. Four signals. Zero ambiguity.

SBA 7(a) Assumptions Used
10%
Down Payment
7.5%
Interest Rate
10 yrs (120 mo)
Term
1.25x
Min DSCR

Each dimension scores 1 to 5. Those four scores combine into a normalized composite from 0 to 100. The composite weighs DSCR and Transferability slightly heavier — because a deal that fails either of those gates cannot close, regardless of how attractive the other dimensions look. Margin and Cash-on-Cash are bounded by the bank's reality, not the buyer's optimism.

STRONG
80–100

Institutional-grade. Pursue aggressively. The composite shows margin, fundability, return, and transferability all aligned.

SOLID
60–79

Real deal with one or two weak dimensions. Workable with the right structure — seller note, earn-out, or transition agreement.

CAUTION
40–59

Material weakness in at least one dimension. Re-trade the price, restructure the terms, or walk. Do not LOI at asking.

AVOID
0–39

The math does not work. Either the seller is dreaming on price or the underlying business is broken. Pass and protect your capital.

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