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DSCR calculator

Debt service coverage ratio (DSCR) is the cash your business earns in a year divided by the loan payments due that year. The SBA's minimum is 1.10x to 1.15x depending on the loan; many banks want about 1.25x.

How DSCR is calculated

DSCR = yearly cash flow available for debt (usually EBITDA) / yearly principal and interest. A DSCR of 1.25x means the business earns $1.25 for every $1 of loan payments.

What lenders look for

SBA minimums are 1.10x for 7(a) small loans (up to $350,000) and 1.15x for standard 7(a) and 504 loans. Many banks want a cushion above that, often 1.25x. Your lender's rule is the one that counts.

How to raise it

Borrow less, stretch the term, put in more equity, or show higher cash flow with assumptions you can defend. The 5-year templates show DSCR for every year of your plan.