Business loan DSCR calculator
Enter the borrower’s cash available for debt service, existing debt and new loan. See the DSCR, the largest loan your minimum allows and how far income can fall in a minute.
DSCR with new loan
With the loan of €1,200,000, the DSCR is 1.51×, above the minimum of 1.25×, and the minimum would allow a loan of up to €1,679,464.
Income can fall 17.4% before the ratio reaches the minimum and 33.9% before the cash no longer covers the debt service.
DSCR as income moves
The line shows DSCR as income moves, the orange dot marks today, the open dot marks the stress, and dashed lines mark your minimum and 1.0.
Loan figures
| Cash available | €480,000 |
| Existing debt service | €150,000 |
| New loan debt service | €167,196 |
| Total debt service | €317,196 |
| DSCR with new loan | 1.51× |
| Yearly payment room | €234,000 |
| Largest loan | €1,679,464 |
| Income fall to 1.0 | 33.9% |
| DSCR after 20% fall in income | 1.21× |
The copied cells paste into a decision table as two columns, with the DSCR range as the condition and the outcome as the result.
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Use your minimum as a rule in the business credit decision, with the stress and largest loan worked out on every application. Start free
Calculation details
New loan debt service = 12 × Loan amount × r ÷ (1 − (1 + r) ^ −n) (r = Annual interest rate ÷ 12, n = Term in years × 12; Interest only: Loan amount × Annual interest rate) DSCR = Cash available ÷ (Existing debt service + New loan debt service) Yearly payment room = Cash available ÷ Minimum DSCR − Existing debt service Largest loan = Loan amount for payment (Yearly payment room) Income fall to minimum = 1 − Minimum DSCR × Total debt service ÷ Cash available
This uses one year’s cash flow and assumes no growth, balloon, fees or tax. The cash measure is yours, and the minimum comes from your policy.
Calculate the debt service coverage ratio
The debt service coverage ratio compares cash available for debt service with the yearly debt service. Enter the borrower’s cash measure, existing debt service and new loan terms to see the ratio with the new loan.
Compare the result with your minimum DSCR to see how the loan sits against your policy. The calculator also shows the largest loan the minimum allows and how the ratio changes as income falls.
DSCR questions
How do you calculate the debt service coverage ratio?
Divide cash available for debt service by existing debt service plus the new loan’s debt service. The calculator shows the result for the loan terms entered.
What DSCR do lenders look for?
The minimum DSCR is each lender’s own policy. The calculator compares the loan’s DSCR with the minimum you enter.
How do I calculate the maximum loan from DSCR?
The calculator works out yearly payment room as cash available divided by the minimum DSCR, less existing debt service. It converts that room into a loan amount at the entered rate and term.
Should I use net operating income or EBITDA for DSCR?
Use the cash measure you use for the loan, such as net operating income or EBITDA. The calculator uses the figure you enter as cash available for debt service.
How do I stress test DSCR?
Enter an income stress and the calculator shows DSCR after that fall. It also shows how far income can fall before the minimum and before cash no longer covers debt service.