How Much Business Loan Can You Get? DSCR and the 2026 SBA Limit Table

Published 2026-11-07 · eLoanTree Blog

How much can I borrow? is the first question most business owners ask, and it is the wrong place to start. Lenders do not lend against revenue. They lend against cash flow left over after you pay your existing debts.

That cash flow test is called the debt service coverage ratio, or DSCR. It decides how much you can borrow, which program fits, and whether an SBA guarantee helps. This article explains DSCR with a worked example, then lays out the 2026 SBA limit table, with sources and dates, and corrects two myths that spread widely on social media in 2026.

1. What DSCR is

DSCR is annual cash flow available for debt payments, divided by annual debt payments, including the new loan.

DSCR = cash flow available for debt service divided by total annual debt service.

A DSCR of 1.25 means cash flow covers debt payments 1.25 times. A DSCR of 1.00 means cash flow exactly covers payments, with no room for a bad month. A DSCR below 1.00 means cash flow does not cover payments.

Lenders use different measures of cash flow. For many small businesses, they start with sellers discretionary earnings, or SDE, which is profit plus the owners salary and owner benefits. They may adjust for one-time expenses, rent, and other items. The exact definition varies by lender and program, so ask how your lender calculates it.

2. A worked example — illustrative only

The numbers below are illustrative, to show the math. They are not a quote, an approval, or a prediction.

Assume a business has $180,000 a year in cash flow available for debt service, after owner salary and operating costs. It already pays $60,000 a year on existing debt. It wants a new loan that would cost $40,000 a year in payments.

Total annual debt service after the new loan = $60,000 plus $40,000 = $100,000.

DSCR = $180,000 divided by $100,000 = 1.80.

That is strong coverage. Now change the example. If the business has $150,000 in cash flow, and total debt service after the new loan is $120,000, DSCR is 1.25. If cash flow is $120,000 and total debt service is $120,000, DSCR is 1.00, and most lenders will say no, because there is no cushion.

DSCR minimums vary by lender and program. For small SBA loans, lenders often look for at least 1.10 times coverage, according to SBA underwriting guidance for 7(a) Small loans as of 2026. For many conventional business loans, lenders often look for 1.20 to 1.50 times coverage, as a general range reported by lenders in 2026.

Those are ranges, not a single guaranteed threshold. A lender can require more for a riskier business, a shorter history, or weaker collateral, and it can require less for a stronger one.

Revenue alone does not tell you DSCR. Two businesses can both report $500,000 in revenue and qualify for very different amounts. A service business with $175,000 in cash flow can support a larger loan than a restaurant with $60,000 in cash flow, even at the same revenue. That is why the existing eLoanTree article on a $500,000-revenue business focuses on cash flow, not on revenue.

3. The 2026 SBA limit table

The U.S. Small Business Administration does not lend money directly. It guarantees a portion of a loan made by a private lender. That guarantee reduces the lenders risk, which can make a loan possible for a business that would not qualify for a conventional loan on the same terms.

The limits below are from SBA program guidance and SBA SOP 50 10 8.1, effective October 1, 2026, and SBA Policy Notice 5000-879058, effective July 4, 2026. Program rules change, so confirm current terms with an SBA lender before you apply.

The 504 program has a different structure. A private lender typically finances up to 50% of the project, a Certified Development Company finances up to 40% through a debenture, and the borrower contributes at least 10%. The $5,000,000 limit in the table is the aggregate debenture limit per borrower for most projects, under 13 CFR 120.931.

Terms also vary. Standard 7(a) loans can run up to 10 years for working capital and equipment, and up to 25 years for commercial real estate, according to SBA program guidance for 2026. SBA Express loans can run up to 10 years. 7(a) Small loans follow the same term rules as standard 7(a) loans for their purpose.

4. The $10 million combined rule — what actually changed

On July 4, 2026, the SBA changed how the 7(a) and 504 limits interact, under SBA Policy Notice 5000-879058, titled Coordination of 7(a) and 504 Maximum Loan Limits.

Before that date, a borrowers combined outstanding balance across 7(a) and 504 was capped at $5,000,000. If you had a $5,000,000 7(a) loan, you could not also get a 504 loan.

After July 4, 2026, the two programs no longer share a single $5,000,000 cap. A borrower can now hold up to $5,000,000 in 7(a) financing and up to $5,000,000 in 504 financing at the same time, for as much as $10,000,000 in combined SBA-backed financing, according to the SBAs May 18, 2026 news release and Policy Notice 5000-879058.

The per-program maximums did not change. The maximum individual 7(a) loan is still $5,000,000. The maximum 504 debenture is still $5,000,000 for most projects. The $10,000,000 figure is a combined total, reached by pairing the two programs, not a new single loan.

That distinction matters. A business cannot apply for a single $10,000,000 7(a) loan. It would need to qualify separately for a 7(a) loan and a 504 loan, for different purposes, and each loan is underwritten on its own cash flow, collateral, and use of funds.

5. Two myths to correct

Myth 1: Anyone can get $5 million with a 680 credit score.

That claim appeared in a 2026 social media post that listed only a 680 credit score and no bankruptcy or felony as the requirements. It is wrong.

Credit score is one factor. Lenders also check cash flow, DSCR, collateral, business history, the use of funds, and the owners personal guarantee. The SBA also requires that, as of March 1, 2026, 100% of all direct and indirect owners be U.S.

citizens or U.S. nationals whose principal residence is in the United States — lawful permanent residents (green card holders) are excluded, under SBA Policy Notice 5000-876441 and Procedural Notice 5000-876626.

A 680 score does not guarantee approval, and it does not guarantee $5 million. The SBAs Small Business Scoring Service score requirement for 7(a) Small loans was discontinued effective March 1, 2026, under SBA Procedural Notice 5000-875701, but lenders still apply their own full credit analysis.

Myth 2: The SBA limit doubled to a $10 million single loan.

As explained above, the SBA did not create a $10,000,000 loan. It decoupled the two programs. A borrower who qualifies for both can hold up to $10,000,000 in combined financing, but each program still caps at $5,000,000, and each loan must be approved on its own merits.

Both myths are dangerous because they set false expectations. A business owner who plans a purchase around $5,000,000 in financing, without checking DSCR and collateral, can lose a deal, a deposit, or months of time.

6. How to estimate what you can borrow

Start with your cash flow, not your revenue. Calculate SDE for the last two to three years, and be ready to show tax returns and bank statements. Lenders will want at least two months of business bank statements for many small SBA loans, according to lender guidance for 2026.

Next, list all existing debt payments, including loans, leases, and credit lines. Add the proposed new loan payment. Divide cash flow by total debt service. If the result is below the lenders minimum, usually around 1.10 for small SBA loans and 1.20 to 1.50 for many conventional loans, as a general range, you will need more cash flow, a smaller loan, a longer term, or more collateral.

Then check the program fit. A loan of $350,000 or less may fit 7(a) Small, with a streamlined review. A loan that needs a fast decision may fit Express, but the SBA guarantee is only 50%, so the lender takes more risk and may be stricter. A loan for a building may fit 504, with its three-part structure and longer term.

Finally, ask the lender for the full cost: interest rate, SBA guaranty fee, closing costs, and monthly payment. SBA interest rates are capped by the SBA, based on the prime rate plus a margin.

The prime rate was 7.00% as of October 29, 2026, according to the Federal Reserves H.15 Selected Interest Rates release. The actual rate depends on loan size, term, and the lenders margin, and it is not guaranteed until you lock it.

7. What to do next

Gather your financials, calculate DSCR with your own numbers, and talk to an SBA lender about which program fits your purpose. Bring the use of funds, the amount you need, and the repayment plan. A lender can tell you whether the loan is feasible, and if not, what would need to change.

The limit table tells you the ceiling. DSCR tells you whether you can reach it. Cash flow, not a social media post, decides the number.