{"ok":true,"canonical_url":"https://dealroom.so/glossary/dscr","api_url":"https://dealroom.so/api/public/glossary/dscr","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":"dscr","term":"DSCR","aka":"debt service coverage ratio","group":"Reading the business","definition":"Yearly cash flow divided by yearly loan payments. 1.25x means $1.25 of cash for every $1 of payments. Lenders want 1.1x minimum, 1.25x to get comfortable.","what_it_means":"DSCR is the single most important number in your underwriting. Lenders divide the business's annual cash flow — after paying you a market-rate salary — by the total annual debt service on the SBA loan plus any other obligations. The SBA requires at least 1.0x globally, but most lenders want 1.25x or better to approve with confidence. A DSCR below 1.0x means the business literally can't cover its debt from operations, which is a hard stop.","url":"https://dealroom.so/glossary/dscr","official_sources":[],"related":[{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"cash-flow-after-debt-service","term":"Cash flow after debt service","url":"https://dealroom.so/glossary/cash-flow-after-debt-service"},{"slug":"amortization","term":"Amortization","url":"https://dealroom.so/glossary/amortization"}],"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":"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":"What are the consequences if the borrower's debt service coverage ratio (DSCR) falls below the lender's minimum after closing?","url":"https://dealroom.so/sba-7a/questions/what-are-the-consequences-if-the-borrower-s-debt-service-coverage-ratio-dscr-falls-below-t"}],"related_tool":{"label":"SBA 7(a) payment calculator","url":"https://dealroom.so/sba-7a/calculator"}},"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 — DSCR","url":"https://dealroom.so/glossary/dscr","source_type":"DealRoom Data"}}