SBA SOP 50 10 7.1 Global Cash Flow and DSCR, calculated instantly.
Combines business cash flow with owner compensation, personal obligations and affiliate entities to produce the global coverage number underwriters actually decide on.
The global challenge
SBA lenders look beyond the business. A 1.40x business DSCR can still fail when the guarantor carries a $9,000 monthly mortgage and an underwater rental property. LoanPacket models the whole household and every affiliate.
Automated combination
Business cash flow available for debt service is combined with owner W-2 compensation, personal tax liability, personal mortgage and auto obligations, living expenses and cash flow from outside entities, each cited to its source return.
Proposed debt modeling
Model the new loan at prime plus spread over 10 or 25 year terms, include seller standby notes and subordinate debt, and see annual debt service and coverage update in real time.
Pass / fail indicators
Instant visual feedback against 1.15x minimum and 1.25x target benchmarks, with the exact dollars of cushion or shortfall so a broker knows the ask before the lender does.
Specification
- Methodology
- SOP 50 10 7.1 global cash flow
- Entities
- Business, guarantors, affiliates, EPC
- Debt modeling
- Prime + spread, 10 / 25 yr, standby, balloon
- Benchmarks
- 1.15x minimum · 1.25x target · custom
- Sensitivity
- Rate +/- 200 bps, revenue -10 / -20%
- Exhibit
- Global cash flow worksheet in memo
$2.4M SBA 7(a) acquisition · 2 guarantors
- 1Business CFADS of $643,980 after substantiated add-backs; proposed debt service $384,600 at prime + 2.75% (10.25%) over 10 years.
- 2Guarantor 1 adds $92,000 W-2 and $98,400 of personal obligations; Guarantor 2 adds rental cash flow of $18,600 from Schedule E. Household living expenses of $96,000 are deducted.
- 3Business DSCR 1.67x; global DSCR 1.36x. Both clear the 1.25x target with $54,800 of annual cushion.
- 4Rate sensitivity at +200 bps drops global coverage to 1.28x; the memo documents that the 1.25x target still holds under stress.
“Multi-entity global cash flow used to take me a weekend. LoanPacket's worksheet is the one that convinced the credit committee.”
Questions
LoanPacket defaults to the lender's stated method, either a percentage of gross income or a household schedule, and documents the assumption in the worksheet.
Yes. The global cash flow worksheet is a standard exhibit in every credit memo and Excel export.
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