What is a good EBITDA margin for a small business?

Most healthy small businesses run an EBITDA margin between 10% and 20%. Service businesses and SaaS often run higher (20–35%+), while restaurants and retail typically run 10–15%. CFO Grade compares your EBITDA margin to industry-specific benchmarks across 16 sectors.

What DSCR do lenders look for?

Most SBA and commercial lenders require a Debt Service Coverage Ratio (DSCR) of at least 1.25x. Construction surety bonds often require 1.5x or higher. A DSCR below 1.0x means your EBITDA does not cover your annual debt payments.

How does CFO Grade calculate the letter grade?

CFO Grade scores 24+ financial ratios across profitability, liquidity, leverage, and efficiency — weighted by industry. The composite score maps to a letter grade from A+ to F. The full methodology and benchmark sources are described in the report and the disclaimer page.

Yes. The full analysis, 24+ ratios, letter grade, and industry benchmarks are completely free with no signup. Optional paid features include a $9 PDF export and a $19 Pro Pass with AI-generated CFO memo and 30 days of unlimited PDFs.

Do I need to create an account?

No account is required. Your numbers stay on your device unless you explicitly opt in to anonymized peer benchmarking. Pro entitlements are bound to your device with a restore link you can email yourself.

Is CFO Grade financial advice?

No. CFO Grade provides educational insights for business owners and analysts. It is not financial, tax, legal, or investment advice. Always verify the output with a qualified professional before making business decisions.

How does CFO Grade estimate what my business is worth?

Every report includes an Enterprise Value range built from your industry's typical EV/EBITDA multiple applied to your EBITDA, adjusted for size (Duff & Phelps size-discount methodology) and quality (your CFO Grade). The paid report unlocks the lender view vs. buyer view breakdown, implied equity to owners, sensitivity analysis, and full source-cited methodology. The dedicated valuation calculator lives at /valuation with industry-specific pages for 11 sectors.

Why does my business valuation change when I rerun the report?

The range moves with three things: your EBITDA (the biggest driver), your revenue size band (which sets the size discount), and your CFO Grade quality factor. When you run a second report in a later period, the Enterprise Value delta is shown prominently — 'You built $220,000 of value since Q3' or 'You lost $180,000 this quarter' — so you can watch the number that actually matters to lenders and buyers over time.

Benchmark · Construction & trades

What's a healthy DSCR for construction & trades?

Short answer

For construction & trades, a healthy DSCR is around ≥ 1.5×. That's the threshold lenders and sureties underwriting construction & trades use as a pass/fail line.

Real peer data

Community median publishes once we have 5+ anonymous submissions from construction & trades. Currently at 0. Run your numbers below to help build it — your ratios are shared, your business name and dollar amounts are not.

Formula

DSCR = EBITDA / (Annual Principal + Interest Payments)

Take EBITDA (operating cash earnings) and divide by your total annual debt service — both principal and interest payments combined.

Why DSCR matters for construction & trades

DSCR is the single most important metric in commercial and SBA lending. A DSCR of 1.0× means your earnings exactly cover your debt — no margin for error. Most SBA lenders require ≥ 1.25×. Construction sureties often require ≥ 1.5×. Below 1.0× and you're net-cash-negative on debt.

For construction & trades, DSCR is often the make-or-break number when applying for a loan, a line of credit, or (in construction) a bonding increase. Bonding capacity is being held back and you don't know why.

DSCR across other industries

Healthcare practice≥ 1.25×Agriculture≥ 1.25×Transportation & logistics≥ 1.3×Hospitality & lodging≥ 1.25×

Common questions about DSCR for construction & trades

What is a good DSCR for construction & trades?+

For construction & trades, a healthy DSCR is around ≥ 1.5×. The exact number depends on scale, region, and business model, but this is the range most banks, acquirers, and industry consultants treat as "healthy."

How is DSCR calculated?+

Take EBITDA (operating cash earnings) and divide by your total annual debt service — both principal and interest payments combined.

Why does DSCR matter more for construction & trades?+

Lenders in this sector treat this as the minimum acceptable ratio. Falling below it doesn't guarantee a rejection, but it does guarantee more scrutiny, higher pricing, and often a personal guarantee.

What's the fastest way to improve my DSCR?+

Run your numbers through CFO Grade — the free memo pinpoints the two or three levers that move DSCR fastest for a business your size, in your industry. Common fixes for construction & trades include either accelerating debt paydown or restructuring existing debt to lower annual service..

See your DSCR — graded against construction & trades peers.

Paste your P&L. CFO Grade computes this — plus 23 other ratios — in seconds, with the construction & trades benchmark already loaded.

Other construction & trades benchmarks

Gross Margin

Target: 15–25%

Net Margin

Target: 3–7%

Current Ratio

Target: ≥ 1.5×

All benchmarks for this industry

Construction & trades financial health hub

Every metric that matters for construction & trades — margins, coverage, efficiency — with plain-English explanations.

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