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DSCR calculator: can the business pay for the loan?

EXAMPLE · SAMPLE DEAL, NOT REAL DATA
On the stated SDE
1.58x
Clears 1.25x
On the supported SDE
0.98x
Does not clear 1.25x
Price the supported number can carry
$955,317
At 1.25x, same cash, notes and working capital

The deal covers the loan on the stated number and not on the supported number. $110,000 of yearly cushion rests on add-backs no document has backed yet. At the supported number, the price this business can carry is $955,317.

Run the same SBA loan against the SDE the listing states and the SDE the documents support, and see whether the deal covers its payments on each. Then find the price the supported number can carry. Pure arithmetic. Nothing is stored.

1 · Start from the cash flow
Two SDEs, one owner's salary — the bank sees what is left after you pay yourself
EXAMPLE · SAMPLE DEAL, NOT REAL DATA
The seller's number, every add-back included
Only the add-backs a document backs. Work it back in the SDE calculator
What it costs to have you run it — the bank deducts this first
Rent step-up, a manager you must hire, benefits — yearly, as a positive number
On the stated SDE$290,000
On the supported SDE$180,000
SDE − your salary − other changes
2 · Structure the deal
The SBA 7(a) rules as of SOP 50 10 8 — your lender may ask for more
Everything financed at closing beyond the price
$1,260,000
Price + working capital + closing costs
Unborrowed, or a personal loan repaid from outside the business
No payments for the life of the SBA loan. Counts toward the injection up to half of it; excluded from debt service
$126,000
SBA minimum is 10% of total project cost = $126,000. Yours: 10%.
A second note the business pays — it adds to debt service
$1,134,000
Project cost − cash − standby note − paid note
Ask your lender; 7(a) rates float off prime
10 years is standard for a business acquisition
3 · Coverage — on the stated number, and on the supported number
Same loan, two cash flows
Coverage floor
Loans closing on or after October 1, 2026. Most lenders underwrite to 1.25x either way.
On the stated SDE
1.58x
Clears 1.25x
Cash available$290,000
Annual debt service$183,620
Cushion after payments$106,380
On the supported SDE
0.98x
Does not clear 1.25x
Cash available$180,000
Annual debt service$183,620
Cushion after payments-$3,620
Price the supported number can carry
$955,317
At 1.25x, holding your cash, notes and working capital constant. Your injection would be 12% of that project cost.

The deal covers the loan on the stated number and not on the supported number. $110,000 of yearly cushion rests on add-backs no document has backed yet. At the supported number, the price this business can carry is $955,317.

Your inputs, your arithmetic. Supported means a document backs the figure — it is not verification, audit, or assurance. The SBA terms are summarized from SOP 50 10 8 and 50 10 8.1 as published; your lender's underwriting governs. Not a lending decision, not financial advice.
VERITY · IN-DEPTH ANALYSIS
Verity does this on the documents themselves.

Upload the listing, the returns, and the P&L — every figure traced to its source page, every contradiction surfaced as a question. Reading your documents is always free; the in-depth analysis that surfaces every contradiction is $20 a deal.

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