Debt Service Coverage Ratio (DSCR) Calculator

Understanding DSCR

The Debt Service Coverage Ratio (DSCR) is a critical metric used by lenders to evaluate a borrower's ability to repay their loan obligations. It measures the relationship between a business's net operating income (NOI) and its annual debt service (loan payments).

A DSCR greater than 1.0 indicates that a borrower generates enough income to cover their debt obligations, while a DSCR less than 1.0 signals insufficient income. For example:

• A DSCR of 1.25 means a business generates 25% more income than needed for debt payments.
• A DSCR of 0.9 means the income is only 90% of the required debt payment.

Use this calculator below to determine your DSCR and loan affordability.