Glossary · The loan itself
Ability to repay
In short
This is the lender's assessment of whether your business's future cash flow can cover all its debt payments, including the SBA loan. It's the primary factor in loan approval.
What it means in a deal
Lenders scrutinize your projections and the business's historical performance to determine your ability to repay. They use metrics like DSCR to quantify this. If the numbers don't clearly support repayment, your loan won't get approved, so ensure your business plan is robust.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Ability to repay
- What happens if a significant post-closing event impacts the borrower's ability to repay an SBA 7(a) loan?
- How does a lender assess the impact of a significant post-closing event on the borrower's ability to repay a 7(a) loan?
- How does an SBA 7(a) loan affect my ability to get future business financing?
- How does a past criminal conviction affect my ability to get an SBA 7(a) loan?
- How does a lender assess the impact of a significant decline in the borrower's industry on 7(a) loan repayment ability?
- How does an SBA 7(a) loan impact a borrower's ability to obtain other federal government financing?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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