Debt service coverage ratio (DSCR) calculator
Work out how many times a borrower's cash flow covers its annual debt payments, and how much cash flow could fall before coverage drops below your minimum.
- DSCR
- 1.33x
- Meets your minimum
- 1.25x required
- Cash flow could fall by
- $37,500 (6.3%)
- Max annual debt service at minimum
- $480,000
How to use it
DSCR = Cash flow available for debt service / Annual debt service (principal + interest)
- Use the cash flow figure your policy defines: net operating income for income property, or EBITDA less unfunded capital expenditure, taxes and distributions for operating companies.
- Annual debt service includes scheduled principal and interest on all debt the borrower will carry after the loan, including the new facility.
- Many lenders look for 1.20x to 1.25x or more; use your own policy minimum in the third field.
For illustration only. Use your institution's own policy definitions.
