Glossary · The loan itself
Debt service coverage ratio waiver
In short
A waiver allows a lender to approve a loan even if the business's projected cash flow doesn't meet the typical minimum Debt Service Coverage Ratio (DSCR). This matters because it can make a deal financeable that otherwise wouldn't be.
What it means in a deal
The SBA generally requires a DSCR of 1.15:1 for most loans. A waiver means the lender can go below this, often to 1.00:1, if the deal has strong mitigating factors. You need to understand why the waiver is needed and if the lender is confident getting SBA approval.
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 Debt service coverage ratio waiver
- When is a debt service coverage ratio waiver or exception possible for an acquisition?
- Does the SBA require a specific debt service coverage ratio (DSCR) for approval?
- 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 a seller note on partial standby affect an SBA 7(a) loan's debt service coverage ratio?
- What are the consequences if the borrower's debt service coverage ratio (DSCR) falls below the lender's minimum after closing?
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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