SBA FCCR Calculator

The Fixed Charge Coverage Ratio (FCCR) measures whether a business's operating cash flow covers its full fixed-obligation load, not just principal and interest. The standard SBA-style view subtracts cash taxes and owner distributions from EBITDA in the numerator, then divides by the sum of current maturities of long-term debt, interest expense, capital lease payments, and other recurring fixed charges. SBA lenders use FCCR alongside global DSCR because SBA borrowers usually carry material lease obligations and owner draws that DSCR alone misses.

FCCR sits inside the broader documentation discipline of SBA SOP 50 10. The SOP does not pin a single numeric minimum to FCCR. It requires the lender to document repayment ability from business cash flow and to keep the file coherent enough to survive review. The specific threshold lives in the lender's internal credit policy.

Two FCCR formulations circulate in SBA practice. The version on this calculator, sometimes labeled SBA-style, keeps the denominator focused on fixed charges and pushes distributions and cash taxes through the numerator. The academic form, (EBITDA + Fixed Charges) ÷ (Fixed Charges + Debt Service), adds operating-lease payments to both sides. Both produce similar ratios on most deals. The SBA-style view is easier to reconcile to the tax return and is more common in community-bank SBA memos.

A community bank is underwriting an SBA 7(a) acquisition loan on a $4M deal. The seller's operating company shows trailing-twelve-month EBITDA of $790,000. Cash taxes paid were $110,000 and the seller drew $90,000 in owner distributions across the year.

On the fixed-charge side, the company carries $150,000 in current maturities of long-term debt (the principal coming due on existing equipment and term notes over the next twelve months), $90,000 in interest expense, $30,000 in capital lease payments on titled vehicles, and another $20,000 in recurring fixed charges captured by the bank's policy.

Numerator = $790,000 − $110,000 − $90,000 = $590,000.
Denominator = $150,000 + $90,000 + $30,000 + $20,000 = $290,000.
FCCR = $590,000 ÷ $290,000 = 2.03x.

That clears the bank's 1.25x SBA 7(a) policy minimum with a meaningful cushion. The credit officer next runs a stress: layer the proposed loan's annual P&I on top of the existing denominator, hold the numerator flat, and confirm the post-close FCCR still clears 1.25x. Pulling distributions back out as discretionary (toggle off) lifts the ratio to 2.34x. Useful for sensitivity, not the number that goes in the memo.

Two inputs on this calculator are toggle-able because lenders genuinely disagree on the treatment. The disagreement matters: on a deal sitting close to policy minimum, flipping either switch can change the approval decision.

Owner distributions. Pass-through entities (S-corps and partnerships) typically distribute enough cash to cover the owner's personal tax liability on the entity's K-1 income, plus whatever else the owner takes home. The conservative SBA view subtracts these from operating cash flow because they are not actually available for debt service. The other view credits them back, subject to a written restriction on draws while the loan is outstanding, and assumes the owner can throttle distributions if cash flow tightens. Both can be defensible. What matters is that the treatment is consistent across the file and disclosed in the memo.

Other fixed charges. Operating leases sit in the same gray zone, and they are what the "other fixed charges" line on this calculator picks up. Lease payments are contractually fixed, so they belong in the denominator alongside debt service for FCCR purposes. Some lender policies strip operating leases out and run a narrower coverage ratio focused on debt-only obligations, tested separately. The calculator defaults to including them because the SBA view of repayment ability from business cash flow generally captures every recurring fixed obligation. Toggle them off only when the bank's policy explicitly separates the test.