DSCR Calculator
DSCR is one of the first metrics lenders check when evaluating a loan application. Enter your income and debt obligations to see your ratio, how lenders interpret it, and what you can afford. Includes simple and detailed calculation modes.
DSCR measures whether your business earns enough to cover loan payments. Enter your numbers below to see your ratio, how lenders interpret it, and the maximum payment you can afford.
Results update in real time as you type. Use Detailed mode if you need to calculate your Net Operating Income.
Annual revenue minus operating expenses, before loan payments. Check your P&L statement.
All annual loan payments: term loans, credit lines, equipment, real estate. Include any proposed new debt.
Your Debt Service Coverage Ratio
1.33
Good
Good Position
Solid position. You will qualify with most lenders and may receive more competitive rates and terms.
Your business generates 33% more income than needed to cover debt payments.
Annual NOI
$200,000
Annual Debt Service
$150,000
Max Affordable Payment
$13,333/mo
at 1.25x target DSCR
Lender Requirements Comparison
| Lender Type | Min DSCR | You |
|---|---|---|
| SBA 7(a) Loans | 1.15 | Meets |
| Bank Term Loans | 1.25 | Meets |
| Commercial Real Estate | 1.25 | Meets |
| Online Lenders | 1.00 | Meets |
| Equipment Financing | Varies | Meets |
What-If Scenarios
Your DSCR of 1.33 puts you in a strong position.
See what rates and terms you qualify for.
Get Your OptionsUnderstanding Your Debt Service Coverage Ratio
Debt Service Coverage Ratio tells lenders one thing: can your business comfortably make loan payments? It is calculated by dividing your annual Net Operating Income by your total annual debt payments. A ratio of 1.0 means you break even. Anything above 1.0 means you have income left over after paying your debts.
Most lenders want to see a DSCR of at least 1.15 to 1.25, depending on the loan type. SBA 7(a) loans typically require 1.15 or higher. Bank term loans generally look for 1.20 to 1.35. Online lenders and lines of credit may accept ratios as low as 1.0 if your other financials are strong. Equipment financing often focuses more on the asset value than on DSCR.
DSCR Benchmarks by Loan Type
| Loan Type | Typical DSCR Requirement |
|---|---|
| SBA 7(a) Loans | 1.15 minimum |
| Bank Term Loans | 1.20 - 1.35 |
| Commercial Real Estate | 1.25 - 1.35 |
| Online Lenders | 1.0 - 1.15 (more flexible) |
| Equipment Financing | Often no DSCR requirement |
How to Improve Your DSCR
If your ratio falls below lender thresholds, you have three levers. First, increase your Net Operating Income by growing revenue or cutting operating costs. Second, reduce existing debt payments by refinancing to longer terms or lower rates. Third, adjust your proposed loan: borrow less, extend the term, or phase the financing over time. Use our loan payment calculator to model different scenarios and see how each one affects your monthly payment.
A strong DSCR can sometimes offset weaknesses in other areas of your application. If your credit is fair but your business generates twice the income needed to cover payments, many lenders will look past the credit score. Similarly, businesses with shorter operating histories but strong cash flow can qualify for products that would otherwise require more time in business.
If your DSCR is below 1.0, traditional term loans may not be available, but you still have options. Asset-based lending evaluates your collateral rather than income ratios. Invoice factoring and revenue-based financing look at different metrics entirely. Take our Loan Finder Quiz to see which product fits your current situation.
How It Works
Enter Your Numbers
Input your Net Operating Income and total debt payments in Simple mode, or break them down in Detailed mode if you need to calculate NOI.
See Your DSCR
Your ratio appears instantly with a visual gauge showing where you land relative to lender thresholds.
Understand Your Position
Review how lenders interpret your ratio, see which loan types you qualify for, and explore what-if scenarios to improve it.
What You Get
DSCR Ratio
Your Debt Service Coverage Ratio calculated instantly with a color-coded gauge showing your position.
Lender Requirement Comparison
See whether your DSCR meets the thresholds for SBA loans, bank term loans, commercial real estate, and online lenders.
Simple & Detailed Modes
Enter NOI and debt directly, or use Detailed mode to calculate NOI from revenue, COGS, and operating expenses.
Max Affordable Payment
The largest monthly payment your business can take on while maintaining a healthy 1.25x DSCR.
What-If Scenarios
See how changes to your income or debt load would shift your DSCR, including adding new debt or growing revenue.
Plain-Language Interpretation
A clear explanation of what your DSCR means for loan approval, with specific next steps based on your result.
DSCR Calculator: Frequently Asked Questions
Ready for a personalized quote?
Our calculators give you estimates. Our funding specialists give you real offers tailored to your business.
Get Your OptionsRelated Tools
Loan Payment Calculator
Calculate monthly payments, total interest, and amortization schedules for any business loan.
Use ToolLoan Affordability Calculator
Find out the maximum loan amount your business can borrow based on what you can comfortably pay each month.
Use ToolLoan Finder Quiz
Answer 5 quick questions and get a personalized loan recommendation matched to your business needs.
Use Tool