{"ok":true,"canonical_url":"https://dealroom.so/glossary/repayment-capacity","api_url":"https://dealroom.so/api/public/glossary/repayment-capacity","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":"repayment-capacity","term":"Repayment capacity","group":"Reading the business","definition":"Repayment capacity is the ability of a business to generate enough cash flow to cover its debt payments. Lenders care because it directly shows if your acquired business can realistically pay back the SBA loan.","what_it_means":"Lenders scrutinize the target business's historical financials and your projections, specifically focusing on cash flow after operating expenses but before debt service. You need strong SDE or EBITDA relative to the proposed loan payments to demonstrate this. If your deal's repayment capacity is weak, it won't get funded.","url":"https://dealroom.so/glossary/repayment-capacity","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"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"cash-flow-after-debt-service","term":"Cash flow after debt service","url":"https://dealroom.so/glossary/cash-flow-after-debt-service"}],"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":"What is the typical repayment term for working capital only?","url":"https://dealroom.so/sba-loans/basics/what-is-the-typical-repayment-term-for-working-capital-only"},{"question":"Does the SBA set specific repayment schedules for 7(a) loans?","url":"https://dealroom.so/sba-loans/basics/does-the-sba-set-specific-repayment-schedules-for-7-a-loans"},{"question":"What are the typical repayment terms for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-are-the-typical-repayment-terms-for-an-sba-7-a-loan"},{"question":"What are the typical repayment periods for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-are-the-typical-repayment-periods-for-an-sba-7-a-loan"},{"question":"What is the typical repayment period for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-typical-repayment-period-for-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 — Repayment capacity","url":"https://dealroom.so/glossary/repayment-capacity","source_type":"DealRoom Data"}}