{"ok":true,"canonical_url":"https://dealroom.so/glossary/capacity-to-repay","api_url":"https://dealroom.so/api/public/glossary/capacity-to-repay","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"capacity-to-repay","term":"Capacity to Repay","group":"Reading the business","definition":"This is the business's ability to generate enough cash flow to cover all its debt payments, including your new SBA loan. Lenders scrutinize this to ensure the business won't default.","what_it_means":"Your lender will analyze historical financial statements and projections to confirm the business can comfortably service the loan. Focus on the Debt Service Coverage Ratio (DSCR), which shows how many times the business can cover its debt. A strong DSCR is crucial for loan approval.","url":"https://dealroom.so/glossary/capacity-to-repay","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"global-cash-flow","term":"Global cash flow","url":"https://dealroom.so/glossary/global-cash-flow"},{"slug":"financial-projections","term":"Financial projections","url":"https://dealroom.so/glossary/financial-projections"}],"related_questions":[{"question":"How does an SBA 7(a) loan typically handle seasonal businesses for repayment capacity?","url":"https://dealroom.so/sba-7a/questions/how-does-an-sba-7-a-loan-typically-handle-seasonal-businesses-for-repayment-capacity"},{"question":"How long do I have to repay an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/how-long-do-i-have-to-repay-an-sba-7-a-loan"},{"question":"How long can I take to repay an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/how-long-can-i-take-to-repay-an-sba-7-a-loan"},{"question":"How long do I typically have to repay an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/how-long-do-i-typically-have-to-repay-an-sba-7-a-loan"},{"question":"Are SBA 7(a) loans grants that I don't have to repay?","url":"https://dealroom.so/sba-loans/basics/are-sba-7-a-loans-grants-that-i-don-t-have-to-repay"},{"question":"How many years do I typically have to repay an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/how-many-years-do-i-typically-have-to-repay-an-sba-7-a-loan"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Capacity to Repay","url":"https://dealroom.so/glossary/capacity-to-repay","source_type":"DealRoom Data"}}