Glossary · The loan itself
Debt service
In short
The cash required to cover the principal and interest payments on a loan over a specific period. Your ability to cover debt service is a key factor in SBA loan approval.
What it means in a deal
Lenders analyze a business's historical and projected cash flow to ensure it can comfortably cover the new SBA loan's debt service, plus any other existing debts. This is often measured by the Debt Service Coverage Ratio (DSCR). You need to demonstrate strong repayment capacity.
Official sources
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 Debt service
- Does the SBA require a specific debt service coverage ratio (DSCR) for approval?
- When is a debt service coverage ratio waiver or exception possible for an acquisition?
- How does a seller note on full standby affect the debt service coverage ratio calculation?
- What level of debt service coverage ratio (DSCR) does an SBA 7(a) lender typically look for?
- How does the SBA evaluate 'prudent lending standards' in 7(a) loan underwriting regarding debt service coverage?
- How does a seller note on partial standby affect an SBA 7(a) loan's debt service coverage ratio?
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.
See which SBA lenders would fund your deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to approve a 7(a) like yours and flag what trips up approval.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.