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Glossary

What is Global Cash Flow?

Also called: global DSCR, global coverage

In one sentence: A combined view of the business and the owner’s household that tests whether all income can cover all debt payments, business and personal.

Last updated · Precise SBA editorial

In plain English

A business does not pay its owner’s mortgage; the owner does, using what the business pays them. Global cash flow follows the money all the way through: it counts the business’s cash, the household’s other income, estimated personal taxes and living costs, and every debt payment, business and personal.

How it is built

  1. Income: the business’s cash flow before owner pay, plus any other household income.
  2. Less estimated personal taxes and a realistic living-cost figure.
  3. = cash available for all debt.
  4. Divide by all debt payments: the deal’s payments plus personal debts such as a mortgage or car loans.

The result is the global DSCR. See DSCR for the ratio itself.

Hypothetical example

The business’s coverage on its own looks strong. But the owner also carries a large mortgage and has high living costs. Once taxes, living costs and personal debt are counted, the household has less room than the business alone suggested, and the global ratio is much lower. The business is not the problem; the combination is.

Why it matters

Lenders rely on the lower of business and global coverage. A strong business inside a stretched household is one of the most common reasons a deal that looks good on paper does not work as structured, and one of the most fixable once you see it.

Common mix-ups

  • It is not a credit score. It measures cash, not payment history.
  • It is not just “personal income.” Business debt carried personally counts as personal debt.
  • The tax figure is an estimate. A flat rate is a simplification; real taxes depend on structure and deductions.

What to do with it

Test it before a lender does. The calculator shows business and global coverage side by side and stresses them.

Common questions

Why do lenders look at my personal finances?

Because owners usually guarantee the loan, and because the same cash that pays business debt also pays for the household. A business can be healthy and still sit inside a household with no room left.

Is global DSCR always lower than business DSCR?

Often, because it adds living costs, taxes and personal debt. If the household has meaningful outside income and little debt, it can be higher. Lenders rely on the lower of the two.

What improves a weak global ratio?

Less debt on the deal, more of your own cash in, a seller note on standby, paying down personal debt, or outside household income. Which lever fits depends on the numbers.

Related terms

Debt Service Coverage Ratio (DSCR)Cash available to pay debts, divided by the debt payments due in the same period; above 1.0x there is a cushion, and lenders want margin above their own minimum.Personal GuarantyA personal promise by an owner to repay a business loan out of their own assets if the business cannot.Add-BacksExpenses added back to reported earnings because they are non-cash, will not continue after a deal, or are personal to the current owner.

Go deeper

How Lenders Calculate Cash Flow and DSCR, Step by StepFrom net income to a coverage ratio in five steps, with every number shown. This is the math behind most acquisition and expansion loan decisions.What SBA Lenders Look At: DSCR and Global Cash Flow in Plain EnglishLenders mostly ask one question: is there enough cash to make every payment, with room to spare? Answering it takes two views, the business and you.

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General information, not legal, tax or financial advice. Precise SBA is not affiliated with the U.S. Small Business Administration. Rules and lender policies change. Examples use hypothetical numbers. We never charge you. If a loan closes, the lender may pay us a referral fee, disclosed on SBA Form 159 (how we get paid). Back to the glossary.