Debt Service Coverage Ratio (DSCR)

Determine your company's debt capacity before submitting an underwriting file. Test EBITDA add-backs to uncover your maximum approved facility size.

Commercial DSCR Diagnostic Terminal

Benchmark Debt Service Coverage Ratio against institutional SBA 7(a) & conventional guidelines

SOP 50 10 7.1 Compliant

Annual Net Operating Income (NOI)$480,000

$100K$1.0M$2.0M$3.0M

Annual Total Debt Service (P&I)$320,000

$50K$500K$1.25M$2.0M

Include Allowable Add-Backs (EBITDA Normalization)

Add back depreciation, amortization & one-off non-recurring costs

Diagnostic Calculated Ratio

1.50xCoverage

Tier-1 Institutional Grade · Preferred SBA 7(a) Rates

Underwriting Benchmark

At 1.25x+, your debt service cushion comfortably exceeds standard SBA guidelines, qualifying for maximal leverage and lowest spreads.

Normalized Cash Flow:$480,000

SBA 7(a) 1.25x Baseline

Standard SBA SOP requires a minimum 1.25x historical or projected coverage on proposed debt. Ratios below 1.15x typically require additional equity injection or collateral pledges.

Normalized EBITDA Add-Backs

Underwriters allow non-recurring legal expenses, owner compensation exceeding market rates, and non-cash depreciation to be credited back to annual operating income.

Refinance High-Interest Debt

Replacing short-term MCA balances with 10-year amortized SBA debt dramatically slashes monthly debt service, immediately elevating your DSCR by 30% to 70%.