What is a debt schedule on an SBA loan application?
Short answer
It is a list of everything the business owes, prepared by you. SOP 50 10 8.1 requires one with the year-end and interim balance sheets on 7(a) loans. The 504 rules spell out each field. Sources: Appendix 20, Para. A.1.d; Sec. C, Ch. 1, Para. F.2.
A debt schedule is a list of every debt the business owes, prepared by you for the lender. SOP 50 10 8.1, Appendix 20, Para. A.1.d requires one with the year-end and interim balance sheets on a 7(a) loan.
Why lenders want it
Debt service coverageCash available for loan payments, divided by those payments. Above 1 means the cash covers them. Full definition counts the required payments on all business debt, including the new SBA loan. Sec. B, Ch. 1, Para. C.2.a calls a current schedule important to a complete analysis. It also says the schedule should include shareholder debt.
What to list
The 7(a) section does not prescribe a format. The 504 rules do (Sec. C, Ch. 1, Para. F.2.a.xviii, about p. 260):
- Original date and amount.
- Monthly payment.
- Status: current, delinquent, paid in full or charged off.
- Interest rate and present balance.
- Maturity.
- To whom it is payable.
- Collateral securing the loan.
That list covers each short-term and long-term loan, including any planned for the next 12 months.
How lenders test it
On a 7(a) Small loan, the lender reviews the two most recent months of commercial bank activity on the primary operating account. SBA says this confirms the debts in the calculation, including merchant cash advances (Information Notice 5000-877673, question 8).
Government debt gets its own list
A 504 application needs a separate schedule of previous government financing (Para. F.2.a.xix).
Leave nothing off. A missing debt can change your coverage number.
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