Glossary · Reading the business
Repayment Ability
In short
This is the business's capacity to generate enough cash flow to cover all its debt obligations, including your new SBA loan. Lenders scrutinize this to ensure the business can handle the loan payments.
What it means in a deal
Your lender will analyze historical cash flow, projected earnings, and your personal financial strength to determine if the business can service the new debt. They look at metrics like DSCR and global cash flow. If the business can't clearly cover the debt, your loan won't get approved.
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 Repayment Ability
- 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 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 an SBA 7(a) loan impact a borrower's ability to obtain other federal government financing?
- What happens if a significant post-closing event impacts the borrower's ability to repay an SBA 7(a) loan?
- How much does a lower personal credit score, like 620, impact my ability to get an SBA 7(a) loan?
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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