What is Fixed Charge Coverage Ratio (FCCR)?
A broader coverage metric than DSCR that includes all fixed obligations — debt service plus lease payments, insurance, taxes, and other recurring costs.
Formula
FCCR = (EBITDA + Fixed Charges) ÷ (Fixed Charges + Debt Service)
Typical range
SBA lenders commonly use FCCR with a 1.15x minimum for 7(a) loans
Fixed Charge Coverage Ratio (FCCR) in commercial lending practice
FCCR is required by SBA underwriting standards (notably 7(a) and 504) and is increasingly used in C&I underwriting where lease obligations and other fixed costs materially impact repayment ability. FCCR captures total fixed obligation coverage, not just contractual debt — particularly important for borrowers with significant operating leases, equipment leases, or long-term insurance and tax commitments.
Related terms
Related concepts in commercial underwriting
DSCR (Debt Service Coverage Ratio)
The ratio of net operating income (or available cash flow) to total annual debt service, including principal and interest payments.
Read definitionSBA Loan (Small Business Administration)
A loan partially guaranteed by the U.S. Small Business Administration, reducing lender risk and enabling access to capital for small businesses that might not qualify for conventional financing.
Read definitionGlobal Cash Flow Analysis
An underwriting approach that consolidates the cash flows of all related entities and guarantors — not just the borrowing entity — to assess total repayment capacity.
Read definitionSee it in Aloan
How Fixed Charge Coverage Ratio (FCCR) shows up in AI underwriting
Aloan automates the underwriting analysis where fixed charge coverage ratio (fccr) matters — spreading, global cash flow, credit memo generation — with source-cited audit trails on every figure. See it run on a real deal in your standardized format.
Ready to modernize your underwriting?
See Aloan run on your standardized cash flow & ratios workflow.