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Can the business pay for its own loan?
Coverage is the question that decides whether a deal happens. It needs one thing before it can answer: which earnings figure you are using.
01 — Cash flow
Annual cash flow$310,000
Basis
Required. The same business gives two different ratios depending on which you use.
02 — What it has to cover
Annual debt service$121,749
Work it out in the SBA calculator →What you need to drawNothing
Lenders test coverage before your salary. You live on what is after it.
Working capital held backNone
03 — The test
Coverage threshold1.25×
1.25× is a widely used lender convention, not a Revanu figure. Confirm what your lender applies.
Check one field
Set the basis before we show you a ratio
SDE and EBITDA describe the same business differently: SDE adds the owner’s pay back in, so it produces a higher figure and a better-looking ratio. A coverage number without its basis beside it is not a fact anyone can act on, so this tool will not print one.