Acquisition Calculator
DSCR Calculator
Will an SBA lender approve the loan? Run the deal against the SBA's 1.15× debt-service-coverage minimum and the 1.25× conservative threshold most banks underwrite to.
Cash flow before debt service and owner salary
What you need to draw from the business
Purchase price minus down payment
SBA 7(a) typical range: 10–12% in 2026
Goodwill acquisitions: 10 years; with real estate: up to 25
What DSCR is and why it matters
Debt Service Coverage Ratio (DSCR) is the ratio of the cash flow available for debt service to the actual annual debt service. It's the single number most SBA lenders look at first when underwriting an acquisition loan.
Available cash flow on a small-business acquisition is SDE minus the buyer's required owner salary. The excess is what's available to service the loan.
The thresholds
1.15× — SBA floor. Below this and the deal won't be approved as structured. 1.25× — conservative threshold. Banks want a cushion above the floor. 1.50×+ — comfortable. Buffer for surprises and reinvestment.
If the DSCR comes in below 1.15×, the only paths to a deal are: negotiate a lower price, increase the down payment to shrink the loan, take a lower owner salary (within reason), or move on. More on SBA loan structure.