Glossary · underwriting

Global cash flow analysis

Also called global cash flow, global DSCR, combined cash flow.

An underwriting method that adds the owner's personal income and personal debt to the business's, on the theory that a guarantor and the guaranteed business share one wallet.

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

What it means

Bank and SBA underwriters rarely look at a closely held business in isolation. If the owner guarantees the debt, the owner's mortgage, car notes, credit cards, student loans, and any other business they guarantee are all claims on the same cash. Global cash flow rolls them together and asks whether the combined income covers the combined obligations.

The mechanics are unglamorous. The analyst takes business cash flow available for debt service, adds owner salary, distributions, spousal income and any documented outside income, then subtracts personal living expenses and every personal debt payment on the credit report. What survives is divided by total debt service to produce a global coverage ratio.

What surprises borrowers

  • Distributions the owner takes out of the business are not new income; they are already inside business cash flow and get netted out to avoid double counting
  • Guaranties on other entities count. A guaranty on a sister company's loan is a contingent liability, and a conservative analyst will include some or all of that payment
  • A spouse's income usually only helps if the spouse signs
  • Rental property that runs at a loss reduces the number

Where it applies

Common in SBA 7(a) and 504 credit memos, bank term loans and lines, and any owner-occupied commercial real estate deal. It is not used in merchant cash advance underwriting, which looks at deposit behaviour rather than income statements.

Where this one catches people

Owners prepare the business financials meticulously and then hand over a personal financial statement they filled in from memory. The personal side is pulled from a credit report, not from your form, and every undisclosed obligation that appears there is both a coverage problem and a candour problem. Contingent liabilities from guaranties on other entities are the item most often left off and most often found.

Worked through

Illustrative only. A business generates $180,000 of cash flow available for debt service and the owner takes a $90,000 salary from it. Proposed new loan payments are $60,000 a year. The owner's personal mortgage, auto and card payments total $54,000 a year, and personal living expenses are estimated at $36,000.

Combined income: $180,000 (business cash flow, which already contains the salary).
Combined obligations: $60,000 new business debt + $54,000 personal debt + $36,000 living expenses = $150,000.

Global coverage = $180,000 / $150,000 = 1.20x. Whether that clears depends entirely on the individual lender's credit policy, which varies.

Figures in the example are illustrative. They show the arithmetic, not a quote — what any one lender would charge is on that lender's page, where it is published at all.

Where you will meet this term

Term Loan Business Line of Credit SBA Loan Equipment Financing

Read next

Debt service coverage ratio (DSCR)Cash available for debt payments divided by the payments due in the same period; above 1.0 means the cash cov… GuarantorThe individual or entity who agrees to answer for a business's obligation if the business does not, putting p… LeverageThe proportion of a business funded by debt rather than owner capital, measured against equity or against ear… LiabilityAn obligation to pay or perform — used in three distinct senses across a funding file: the balance sheet line… Personal financial statement (PFS)A signed schedule of an individual's assets, liabilities, income and contingent liabilities, required from si… Personal guarantee (PG)An individual's separate promise to pay the business's obligation out of personal assets, enforceable even af…

Global cash flow analysis — common questions

What does global cash flow analysis mean?

An underwriting method that adds the owner's personal income and personal debt to the business's, on the theory that a guarantor and the guaranteed business share one wallet.

Where does global cash flow analysis catch people out?

Owners prepare the business financials meticulously and then hand over a personal financial statement they filled in from memory. The personal side is pulled from a credit report, not from your form, and every undisclosed obligation that appears there is both a coverage problem and a candour problem. Contingent liabilities from guaranties on other entities are the item most often left off and most often found.

Is global cash flow analysis the same as an interest rate?

Global cash flow analysis is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.

Which products does global cash flow analysis apply to?

Term Loan, Business Line of Credit, SBA Loan, Equipment Financing.

Is there a worked example of global cash flow analysis?

Yes, on this page, and it is labelled illustrative. It shows the arithmetic, not a quote from any lender.

What else should I read alongside global cash flow analysis?

Debt service coverage ratio, Guarantor, Leverage, Liability, Personal financial statement.

Has this definition been checked?

Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.

Is this legal advice?

No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.

Can I suggest a term?

Yes — [email protected]. The glossary grows from what people are actually shown in contracts.