Lenders are more cautious when lending to smaller businesses, especially those with less than $10 million in EBITDA. This may translate to a higher required DSCR for smaller businesses to compensate for the increased risk perceived by lenders. Investment bankers find it difficult to arrange senior debt for businesses with less than $10 million in EBITDA.
Lenders price risk. Smaller companies have thinner management benches, more customer concentration, and less room for a bad quarter. They also have fewer lenders competing for the loan. That shows up as a higher DSCR floor, lower leverage, and more personal-guarantee and collateral requirements.
Pepperdine's 2026 investment-banker survey asked how hard it is to arrange senior debt by EBITDA size. Scores rise with size. Companies under $1 million of EBITDA sit in extremely difficult territory. The market eases above $5 million and is clearly more open above $10 million. That is the same $10 million EBITDA line bankers have used for years: below it, a conventional senior loan is hard to place.
LSEG's mid-2026 read of sponsored middle-market deals shows the same pattern on leverage. Borrowers under $10 million of EBITDA averaged about 3.65x total debt. The $10 to $20 million band averaged about 4.32x. More leverage at a given coverage ratio means a larger company can support a larger loan.
Bank survey data points the same way on guarantees. Loans under $5 million almost always require a personal guarantee and collateral. Those requirements fall off sharply once the loan is above $10 million.
If your company is under that $10 million EBITDA mark, plan for a thicker cash-flow cushion, a larger seller note, or a credit-enhancement program (including SBA 7(a) where the deal qualifies). Do not assume a private-equity-style senior package will show up.