DSCR Calculator
Audit your Debt Service Coverage Ratio before you apply
Debt Service Coverage Ratio is the single most important number in commercial lending underwriting. A DSCR below 1.20x means your cash flow doesn't cover your debt payments — most lenders won't approve you. Use this tool to audit your DSCR with non-recurring income kickouts and the new proposed loan payment included.
- ✓Instant DSCR with non-recurring kickouts (G/L on asset sale, insurance proceeds, etc.)
- ✓Add proposed new debt service to see impact on approval odds
- ✓Color-coded against lender thresholds (1.0×, 1.20×, 1.35×, 1.50×)
DSCR Calculator
Debt Service Coverage Ratio — lenders typically require 1.20–1.35x
e.g. G/L on asset sale, insurance proceeds, PPP forgiveness
Debt Service
New loan payments being underwritten
Acceptable
Most commercial lenders require a minimum DSCR of 1.20x. SBA loans often require 1.25x or higher.
For informational purposes only. Lender requirements vary.
Frequently Asked Questions
What is a good DSCR for a business loan?
Most lenders require a minimum DSCR of 1.20x. A ratio of 1.35x or higher puts you in a strong position for both approval and better rates. Below 1.0x means your cash flow doesn't cover existing debt payments.
What are non-recurring kickouts?
Non-recurring income items — like a one-time gain on asset sale, insurance proceeds, or an SBA PPP loan — inflate your income in that year. Lenders remove (kick out) these items to get your normalized, sustainable income. You should do the same before applying.
Does DSCR include the new loan payment?
It should — and that's what this calculator does. Always run your DSCR with the proposed new debt included. That's what the lender will see.
What NOI figure should I use?
Net Operating Income for DSCR purposes is typically your business net income plus depreciation, amortization, interest expense, and owner's compensation above market rate. Use your most recent 2 years of tax returns and average them if there's volatility.