When calculating if an SBA deal meets the 1.25x DSCR requirement, how do you account for a seller note?
• How does it work if the principal is due as a bullet payment at maturity, but there’s cash interest in the interim?
• What if the interest is PIK (paid-in-kind) and the principal is a bullet payment?
• How do you handle a structure with 2 years of no payments (interest and/or amortization), followed by 3 years of amortization and/or cash interest?
Also what are the most common scenarios?
Thank you!
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