Glossary · Reading the business
Global debt service capacity
In short
A lender's evaluation of the combined ability of the business and all guarantors to repay all their debts, including the new SBA loan. Buyers care because it determines if the deal is viable from a lending perspective.
What it means in a deal
This is a critical underwriting component where the lender assesses not just the target business's cash flow, but also any other personal or business debt held by you and other guarantors. The total cash flow from all sources must be sufficient to cover all existing and proposed debt payments, typically measured by DSCR.
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 Global debt service capacity
- 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.
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