What DSCR do SBA lenders require by industry?

The thresholds are the same in every industry — a 1.15x SOP 50 10 8 minimum and a 1.25x lender standard with a 10% cash-flow stress test. What changes by industry is how the cash flow is built and challenged: royalty loads for franchises, prime cost for restaurants, RevPAR with occupancy for hotels, collections rates for dental and veterinary practices.

Why do underwriters kick back projections?

Because the inputs can't be defended. Every assumption in a projection should trace to a documented range — an FDD item, a POS report, an STR report, a practice management report — or an industry norm. Projections whose margins sit outside defensible ranges get repriced or declined, so write your assumptions down with sources.

SBA Resources · Updated July 2026

SBA Underwriting Benchmarks by Industry

Underwriters kick back projections whose inputs can't be defended. These are the ranges they check yours against.

SBA DSCR thresholds are universal — a 1.15× SOP 50 10 8 minimum, a 1.25× lender standard, and a 10% cash-flow stress test — but underwriters judge the cash flow behind the ratio by industry: royalty load, prime cost, USALI norms, collections rates. Every projection input should trace to a documented range below.

Written by Thomas Hartwell, author of the FUNDED series of industry-specific SBA lending guides.

The Thresholds That Apply to Every Industry

Measure	Standard	Source
Minimum DSCR	1.15× (startups/ramping deals: within first two years)	SOP 50 10 8
Lender standard	1.25× global DSCR	Prevailing bank credit policy
Stress test	10% decrease in monthly cash flow	Standard underwriting practice
Equity injection	Minimum 10% of total project costs	SOP 50 10 8

Run your own number in the global DSCR calculator, or read how lenders calculate global DSCR.

Franchise Benchmarks

Typical SBA loan term: 10 years (no real estate) (SOP 50 10 8)

Metric	Defensible range	Source / where to verify
Royalty	4–8% of gross sales	FDD Item 6
Brand/ad fund	1–4% of gross sales	FDD Item 6
🔒 + 4 more benchmarks for franchise deals (Ramp to mature volume, SDE multiple (resales), Franchise directory listing, Comfort letter) — with defensible ranges and sources — in the Underwrite Yourself kit.

Full deal math + the complete benchmark set for this industry: the FUNDED Franchise guide.

Restaurant Benchmarks

Typical SBA loan term: 10 years (no real estate) (SOP 50 10 8)

Metric	Defensible range	Source / where to verify
Food & beverage cost	28–35% of sales	Industry norm; above 35% signals a menu pricing problem
Labor incl. taxes	25–35% of sales	Prime cost (food + labor) must stay under 65%
🔒 + 3 more benchmarks for restaurant deals (Occupancy, SDE multiple, Transition revenue retention) — with defensible ranges and sources — in the Underwrite Yourself kit.

Full deal math + the complete benchmark set for this industry: the FUNDED Restaurant guide.

Hotel Benchmarks

Typical SBA loan term: 25 years (real-estate heavy) (SOP 50 10 8)

Metric	Defensible range	Source / where to verify
Rooms dept expense	22–30% of room revenue	USALI department norms
Undistributed operating	20–26% of revenue	USALI
🔒 + 5 more benchmarks for hotel deals (Brand/franchise fees, FF&E reserve, Appraisal basis, Closing costs, ADR / RevPAR) — with defensible ranges and sources — in the Underwrite Yourself kit.

Full deal math + the complete benchmark set for this industry: the FUNDED Hotel guide.

Dental Practice Benchmarks

Typical SBA loan term: 10 years (SOP 50 10 8)

Metric	Defensible range	Source / where to verify
Staff wages	24–30% of collections	Practice norms (excluding owner)
Dental supplies	5–7% of collections	Practice norms
🔒 + 4 more benchmarks for dental practice deals (Lab fees, Total overhead, Collections rate, Practice multiple) — with defensible ranges and sources — in the Underwrite Yourself kit.

Full deal math + the complete benchmark set for this industry: the FUNDED Dental Practice guide.

Veterinary Practice Benchmarks

Typical SBA loan term: 10 years (SOP 50 10 8)

Metric	Defensible range	Source / where to verify
Drugs & supplies	18–24% of revenue	Including lab + food resale
Staff wages	25–32% of revenue	Excluding owner-DVM
🔒 + 3 more benchmarks for veterinary practice deals (Occupancy, EBITDA margin (well-run), Practice multiple) — with defensible ranges and sources — in the Underwrite Yourself kit.

Full deal math + the complete benchmark set for this industry: the FUNDED Veterinary Practice guide.

Where These Numbers Come From

These ranges are compiled from the sources underwriters themselves use — FDD Items 6 and 19, USALI department norms, BizBuySell comparables, practice-management norms — and are the same benchmark set used throughout the FUNDED series. Program facts (loan terms, DSCR floors, injection minimums) are verified against the current SBA SOP 50 10 8, 13 CFR Part 120, and the latest Procedural Notices.

Ranges are norms, not rules: a number outside a range isn't automatically wrong, but expect to defend it with a document. Lenders require written assumptions — note the source for every projection input.

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SBA Underwriting Benchmarks by Industry

The Thresholds That Apply to Every Industry

Franchise Benchmarks

Restaurant Benchmarks

Hotel Benchmarks

Dental Practice Benchmarks

Veterinary Practice Benchmarks

Where These Numbers Come From

Know what lenders check before they check it

Related Resources

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Global DSCR Explained

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