SEARCHER SCHOOL

SBA Deal Stress-Tester

Will your deal survive SBA underwriting?

Enter your deal and see the math a 7(a) lender runs: debt service coverage, equity injection, seller note treatment, and the guaranty fee. The rules changed on October 1, 2026. This tool tests your deal under both regimes, so you know which one you are walking into.

SOP 50 10 8 before Oct 1, 2026. SOP 50 10 8.1 on or after. Complimentary, no cost.

Your timeline

Your timeline

When will your loan number be issued?

SOP 50 10 8.1 applies: 1.25x DSCR floor, historical earnings only, tighter injection sourcing.

The deal

The deal

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Real estate financed on the 7(a) can amortize over 25 years, blended with the 10-year business portion.

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Earnings

Earnings

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Earnings basis
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Comes out of cash flow before debt service. Lenders will not accept a zero here.

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Structure

Structure

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SBA minimum is 10% of total project cost for a complete change of ownership.

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Rate and other debt

Rate and other debt

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Equipment loans, lines of credit, anything else the business pays annually.

stress-testSOP 50 10 8.1

Debt service coverage

1.69x
Clears the 1.25x floor

CFADS of $260,000 against total annual debt service of $153,483.

Sources and uses

Business purchase price$1,000,000
Working capital + closing costs$50,000
SBA guaranty fee (financed, 75% guaranteed)$25,392
Total project$1,075,392
SBA 7(a) loan (10.00%, 10.0 yr)$967,853
Equity injection$107,539
Total sources$1,075,392
SBA annual debt service$153,483

Educational tool, not lender guidance or financial advice. Rules summarized from SBA SOP 50 10 8 and SOP 50 10 8.1. Every lender overlays its own credit policy. Verify with your lender.

Unlock the full stress test

Enter your email and the rest of the analysis opens here, with a plain-text copy of your inputs and results sent to your inbox:

  • DSCR at 10%, 20%, and 30% cash flow declines
  • The break-even decline where your deal stops covering
  • The maximum business price this structure supports
  • Every rule check, pass or fail, with what to change to make the deal work

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“The lender is not testing your story. The lender is testing whether last year’s cash flow pays next year’s debt.”

Go deeper

The rules, written out

Methodology

How this tool computes your deal

CFADS, the two-pass guaranty fee, the blended term, the coverage test, the break-even decline, and how the maximum supportable price is solved. Every constant, with its source.

Read the methodology

Rule change

What SOP 50 10 8.1 changed on October 1, 2026

Seven changes to change-of-ownership underwriting, which loans they apply to, and what each one does to the price a deal can carry.

Read the changes

Questions

The rules behind the math

+What is DSCR?

Debt service coverage ratio: the cash flow available for debt service divided by the annual debt payments. This tool computes CFADS as SDE minus your salary as the new owner minus a capex reserve, then divides by the SBA payment, any counted seller note payment, and other business debt service. A 1.25x DSCR means the business generates $1.25 of cash for every $1.00 of debt payments.

+What changes on October 1, 2026?

Loans with SBA loan numbers issued on or after October 1, 2026 fall under SOP 50 10 8.1. The DSCR minimum for an initial acquisition rises from 1.15x to 1.25x, coverage is tested on historical earnings only, interest-only seller notes are imputed as 10-year amortizing for coverage, aggregate transaction debt is capped at the supported business valuation, the 10% equity injection becomes non-waivable, and 7(a) Small underwriting is no longer permitted for any change of ownership. Loans with numbers issued before that date are underwritten under SOP 50 10 8.

+How do seller note standby rules work?

A seller note can count toward your 10% equity injection only if it is on full standby, meaning no payments of principal or interest for the entire life of the SBA loan. Even then it can cover at most half of the required injection; the other half must come from unlimited sources such as your own cash. A note that amortizes or pays interest counts as debt, not injection, and its payments land in the coverage test.

+When is a Quality of Earnings report required?

Under SOP 50 10 8.1, a lender-commissioned Quality of Earnings report is mandatory when the business purchase price, excluding any owner-occupied real estate, is $3,000,000 or more. The buyer cannot substitute a QoE they commissioned themselves. Below that threshold a lender may still require one under its own credit policy.

+Why do projections no longer count?

SOP 50 10 8.1 requires lenders to test debt service coverage on the last fiscal year end or the average of the last two fiscal years, historical earnings only. A growth story, a turnaround plan, or post-closing synergies cannot carry the coverage test. If the historical numbers do not cover the debt at 1.25x, the structure has to change: a lower price, a larger injection, or a seller note on full standby.

+How is the SBA guaranty fee calculated?

The FY2026 fee applies to the guaranteed portion of the loan and may be financed. Gross loans at or under $150,000 pay 2%; $150,001 to $700,000 pay 3%; above $700,000 the fee is 3.5% of the first $1,000,000 of the guaranteed portion plus 3.75% of the remainder. The guaranty is 75% for loans over $150,000, and the maximum 7(a) loan is $5,000,000.

This is an educational tool, not lender guidance and not financial, legal, or tax advice. The rules above are summarized from SBA SOP 50 10 8, SOP 50 10 8.1, and the FY2026 fee notice. Every lender overlays its own credit policy on top of the SBA minimums, and many underwrite tighter than the floors shown here. Verify every number with your lender before you rely on it.