DSCR Calculator for Business Loans — Do You Qualify? (2026)
Your debt-service coverage ratio is the first number a business lender checks. Enter your operating income and current debt payments to see your DSCR, whether you clear the 1.25 threshold most lenders use, and roughly how large a new loan your cash flow could support — with a sensitivity table showing how stricter or looser underwriting changes the answer.
Revenue minus operating expenses, before debt payments.
Total principal + interest across all current loans.
Your current DSCR
2.50
Your business generates $2.50 of operating income for every $1 of debt payments. Most lenders underwrite to a minimum DSCR of 1.25, so you sit in the approvable range — the figures below estimate how much additional debt you could take on without dropping under that bar.
Borrowing power at DSCR 1.25
Max additional annual debt service
$60,000
Estimated max new loan
$386,406
at 9.5% over 10 years
Est. monthly payment
$5,000
How the lender's threshold changes your number
| Required DSCR | Room for new annual payments | Est. max new loan |
|---|---|---|
| 1.20 | $65,000 | $418,607 |
| 1.25(most common) | $60,000 | $386,406 |
| 1.35 | $51,111 | $329,161 |
Email me my DSCR report + the 9-document lender-readiness checklist
What lenders pull, in the order they ask for it. We send your result band only — never your income figures.
Educational estimate only — not a loan offer, rate quote, or financial advice. DSCR thresholds, income definitions (some lenders use EBITDA or global cash flow), and amortization terms vary by lender and loan program. Your figures are computed in your browser and are not stored or transmitted.
Next steps
Go deeper: cash flow and acquisition finance
Lenders think in coverage ratios — these reads teach you to manage your business the same way.
Main Street Millionaire
Codie Sanchez on buying cash-flowing small businesses — where DSCR math decides every deal.
Check price →Buy Then Build
The acquisition-entrepreneurship playbook, including how SBA lenders underwrite deal cash flow.
Check price →The Psychology of Money
Morgan Housel on why room for error — the cushion DSCR measures — is the core of financial survival.
Check price →We may earn a commission if you buy through these links, at no extra cost to you. How we review
Frequently Asked Questions
- What is a good DSCR for a business loan?
- Most lenders want a debt-service coverage ratio of at least 1.25, meaning your business generates $1.25 of net operating income for every $1.00 of annual debt payments. A DSCR above 1.35 is comfortably approvable at most banks; between 1.0 and 1.25 you cover payments but with a cushion many underwriters consider too thin; below 1.0 your income does not fully cover existing debt and new term loans are usually declined. Thresholds vary — SBA lenders often accept 1.15, while conventional banks may require 1.35 or higher for riskier industries.
- How do lenders use DSCR to decide my loan amount?
- Underwriters work the math backwards from your cash flow. They take your net operating income, divide it by their required DSCR (commonly 1.25), and the result is the total annual debt service they will allow. Subtracting your existing loan payments leaves the room available for a new payment, and amortizing that payment at the offered rate and term gives the maximum loan size. That is exactly the calculation this tool performs — which is why improving NOI or paying down existing debt raises your borrowing power faster than shopping rates.
- How can I improve my DSCR before applying?
- Three levers move the ratio: raise net operating income, reduce annual debt service, or both. Practical steps include cutting discretionary expenses in the months before applying (lenders typically review the trailing 12 months), refinancing short-term debt onto longer amortizations to shrink annual payments, paying off small high-payment balances like merchant cash advances, and documenting add-backs (one-time expenses, owner discretionary spending) that many lenders will credit back to NOI. Even moving from 1.18 to 1.27 can be the difference between a decline and an approval.
- How much of a business loan can I afford?
- Divide your annual net operating income by 1.25, subtract your current annual debt payments, and that is the new annual payment you can support at the standard lender threshold. At 9.5% over 10 years, every $1,000 of available monthly payment supports roughly $77,000 of loan principal. The calculator above runs this with your own numbers and shows how the answer shifts if a lender underwrites to 1.20 or 1.35 instead — but treat the output as a planning estimate, not a pre-approval.