{"ok":true,"canonical_url":"https://dealroom.so/glossary/debt-service-requirements","api_url":"https://dealroom.so/api/public/glossary/debt-service-requirements","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":"debt-service-requirements","term":"Debt Service Requirements","group":"Reading the business","definition":"This refers to the total amount of principal and interest payments a business needs to make on its debts over a specific period. It's crucial for assessing a business's ability to repay a loan.","what_it_means":"Before buying, you must project if the business's Adjusted Net Operating Income can cover the new loan's Debt Service Requirements. Lenders use the Debt Service Coverage Ratio (DSCR) to measure this. Insufficient cash flow to meet these requirements is a major red flag for lenders and a significant risk for you.","url":"https://dealroom.so/glossary/debt-service-requirements","official_sources":[],"related":[{"slug":"debt-service","term":"Debt service","url":"https://dealroom.so/glossary/debt-service"},{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"adjusted-net-operating-income","term":"Adjusted Net Operating Income","url":"https://dealroom.so/glossary/adjusted-net-operating-income"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"}],"related_questions":[{"question":"Does the SBA require a specific debt service coverage ratio (DSCR) for approval?","url":"https://dealroom.so/sba-7a/questions/does-the-sba-require-a-specific-debt-service-coverage-ratio-dscr-for-approval"},{"question":"When is a debt service coverage ratio waiver or exception possible for an acquisition?","url":"https://dealroom.so/for-lenders/questions/when-is-a-debt-service-coverage-ratio-waiver-or-exception-possible-for-an-acquisition"},{"question":"How does a seller note on full standby affect the debt service coverage ratio calculation?","url":"https://dealroom.so/sba-7a/questions/how-does-a-seller-note-on-full-standby-affect-the-debt-service-coverage-ratio-calculation"},{"question":"What level of debt service coverage ratio (DSCR) does an SBA 7(a) lender typically look for?","url":"https://dealroom.so/sba-7a/questions/what-level-of-debt-service-coverage-ratio-dscr-does-an-sba-7-a-lender-typically-look-for"},{"question":"How does the SBA evaluate 'prudent lending standards' in 7(a) loan underwriting regarding debt service coverage?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-prudent-lending-standards-in-7-a-loan-underwriting-regarding-deb"},{"question":"How does a seller note on partial standby affect an SBA 7(a) loan's debt service coverage ratio?","url":"https://dealroom.so/for-lenders/questions/how-does-a-seller-note-on-partial-standby-affect-an-sba-7-a-loan-s-debt-service-coverage-r"}]},"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 — Debt Service Requirements","url":"https://dealroom.so/glossary/debt-service-requirements","source_type":"DealRoom Data"}}