Debt Service Coverage Calculator
Calculate DSCR to determine if your business income can cover loan payments.
Enter Details
Results
Related Calculators
Frequently Asked Questions
What is Debt Service Coverage Ratio (DSCR)?
DSCR = Net Operating Income / Total Debt Service. It measures how many times your income can cover your debt payments. A DSCR of 1.25 means income is 25% higher than debt payments. Most lenders require a minimum DSCR of 1.20-1.25 for business loans and 1.15-1.25 for commercial real estate. SBA loans typically require 1.15+.
What DSCR do lenders require?
Minimum requirements by loan type: SBA 7(a) 1.15x, conventional business loans 1.25x, commercial real estate 1.20-1.30x, construction loans 1.25-1.40x. The higher the DSCR, the better your loan terms. A DSCR of 1.5x or above gives you negotiating power for lower rates and better terms.
How do I improve my DSCR?
Increase the numerator (NOI): grow revenue, cut operating expenses, improve margins. Decrease the denominator (debt service): refinance at lower rates, extend loan terms, pay down principal, or consolidate higher-rate debt. Some lenders also allow adding back depreciation and amortization to NOI. Timing a loan application after a strong revenue quarter also helps.