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A/R Aging Report Guide1031 Exchange GuideLOC GuideSBA 7(a) GuideSBA 504 GuideSection 179 GuideSelling a Business
Setting an Asking PriceUsing a Business BrokerSelling a Business During DivorceSelling a Failing BusinessTransferring Intellectual PropertyPreparing an Online Business for SalePreparing for Sale, Two Years OutSelling a Business QuicklyWriting a Selling MemorandumSelling a Business Step by StepSelling a Business With DebtChanges Worth Making Before SellingPatients sign contracts running two years or more. The receivable that creates behaves nothing like accounts receivable anywhere else.
Contracts receivable of $1.44M discounts to a net book of $888K. The going concern is $2.68M, and the difference is what the tail is worth.
Read from the calculator on its shipped example. Lines marked (derived) are the difference between two of its figures rather than one it displays directly.
Every figure above is computed from inputs you control. Change one and the whole model moves.
A balance running two years or more is not worth its face. The discount is the risk of it not arriving.
Two assets, valued separately. One multiple across both misprices the practice.
The book is 25% of the valuation and close to nothing as collateral — no equipment behind it, and no commercial debtor to pursue. Quoting total value to a lender overstates the advance by the whole book.
These charts are the calculator’s own, drawn from the example it ships with. Put your figures in and they redraw.
Reading collections as the forward indicator. They hold up for a year on contracts signed years ago while new starts fall — and by the time collections drop, the decline is eighteen months old. Starts are what a buyer models.
Rules of thumb that circulate because they are roughly right. The calculator labels them as such and asks you to record your own source.
The tool applies all of this to your numbers, and tells you where it disagrees with itself.
Differently from any other practice, because the balance sheet is the business. Contracts receivable of $1.44M discounts to a net book of $888K on the worked example, and that sits alongside a going-concern value of $2.68M.
They hold up for a year on contracts signed years ago while new starts fall. By the time collections drop, the decline is eighteen months old — which is why the tool models case starts as the forward indicator.
Against the going concern, not the contract book. On the worked example a lender sees $2.68M of lendable value against a $3.57M valuation. The book is consumer paper on two-year treatment plans rather than commercial receivables, so CAPLines does not fit and a 7(a) lender discounts it rather than lending on it.
Enough to price the risk of a two-year balance not arriving. The tool ages the book and applies a tail discount, and states the rate as an assumption rather than a standard.
It decides who is financing the patient. A low share means the practice is a lender as well as a clinic, and lenders are priced differently.
The answers above use the worked example. Your practice will give different ones.
This is the one practice where an asset-based lender and a cash-flow lender see different businesses. The contract book is a receivable, but it is consumer paper on two-year treatment plans, not commercial invoices.
The practice purchase. A lender underwrites collections and case starts, and will discount the contract book rather than advance against it at face.
Where the contract book sits in the stack. It is an asset in the valuation and close to nothing as collateral, and the structure has to survive that.
Standby paper does more work here than in most practice deals, because the receivable a buyer is paying for arrives over years rather than at close.
Only if the building transfers. It funds premises and heavy equipment, never the contract book.
Scanners and imaging. Useful life comfortably outlasts a five-year term, which is what makes borrowing to buy work.
Every 20% owner files one. Expect questions about how the contract book was aged.
Collections hold up for a year on contracts signed years ago. If new starts are moving, you want the contract book aged and discounted well before a buyer does it.
No credit card required now. As long as your details are in the system, we send the discount access details when the software opens.
And the financing calculators are free and working today. SBA 7(a), 504, CAPLines, Form 413, equipment and seller paper — your account opens all of them the moment you register, months before the valuation software ships.
The whole analysis exports as one PDF, generated server-side — every tab, the five-year history, the normalization and the working behind each figure. Not a screenshot of the tab you happen to be on.
It carries the business name, the period, who prepared it and for whom, so a lender or a buyer can act on it without asking who produced the figures.
One email when the software opens, and nothing else. Your details are not sold or passed on.
Figures are the calculator’s worked example, read from the tool itself. Thresholds described as conventions are not market observations. Saving is optional and off by default; saved work is encrypted at rest with AES-256. This tool produces estimates on figures you enter, not a valuation, appraisal, or legal, tax or accounting advice. ExitAdviser is operated by Simplifying Calculation LLC, a Delaware limited liability company.