Question 1

What is DSCR in SBA 7(a) deal modelling?

Accepted Answer

DSCR (Debt Service Coverage Ratio) is Cash Flow Available for Debt Service (CFADS) divided by annual debt service. The SBA requires a minimum 1.25× DSCR. CFADS is not EBITDA — you must subtract market-rate replacement salary, taxes, working capital, and CapEx. Deal14 calculates DSCR automatically from your deal inputs.

Question 2

How much equity injection does SBA 7(a) require for an acquisition?

Accepted Answer

SBA SOP 50 10 8 requires a minimum 10% equity injection of Total Project Cost (TPC), not Enterprise Value. The seller note can count toward the 10% if it is on full standby for the entire SBA loan term. Deal14 tracks SBA equity injection compliance automatically.

Question 3

What is a BRIDGE score?

Accepted Answer

BRIDGE is Deal14's proprietary deal quality score (0–10) that combines Business quality, Recurring revenue, Income consistency, Deal structure, Governance/operations, and Equity value. It gives searchers a single number to compare deals across different sectors and sizes.

Question 4

What is the difference between IOI and LOI in an acquisition?

Accepted Answer

An IOI (Indication of Interest) is a non-binding preliminary expression of interest submitted before full due diligence. An LOI (Letter of Intent) is a more detailed non-binding offer submitted after initial diligence, typically including price, structure, exclusivity, and key terms. Deal14 generates both documents from your deal model.

Question 5

What is a self-funded searcher?

Accepted Answer

A self-funded searcher is an individual who searches for and acquires a small business using their own capital and SBA 7(a) debt financing, without raising a traditional search fund from investors. They typically target businesses with $500K–$2M EBITDA in the lower middle market.

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Model your SBA deal.
In minutes, not days.