Banking
DSCR calculator
Debt service coverage ratio (DSCR) is one of the first numbers a business lender looks at. It compares the cash your business generates to the loan payments it has to make. This calculator walks you through the common add-backs and shows your ratio, your cushion, and what it means in plain English.
Add back interest because it is already inside your loan payments. Only add back interest on debts you include in debt service.
If the new loan pays off an old one, leave the old payment out.
Leave the yearly payment blank if there is no new loan.
Type the rate your lender quoted. If you do not have one yet, type a rate only as your own example. This page does not fill a rate in for you.
Leave this blank if you are only checking loans you already have.
Enter cash flow and the payments you want to check. Leave the new payment blank if you are only looking at loans you already have.
- Cash flow available
- Total debt service
- DSCR
- Cushion
Show the math
Lenders commonly cite roughly 1.20x to 1.25x or higher as a general benchmark. It is not a rule, and lenders calculate cash flow in different ways.
Reviewed October 1, 2026 by Brandon Chiesa, a Central Virginia business banker with 15+ years of experience.
What to do with your results
- If revenue dips for a few months, does the cushion still cover the payments?
- If this loan pays off an old one, did you leave that old payment out?
How to use
- Enter net income from your most recent full year, then the add-backs (depreciation, interest, one-time expenses) and any owner draws.
- Enter your current loan payments, plus the new loan (or send it over from the loan payment calculator).
- Read your DSCR and cushion. If it is tight, try a longer term or smaller amount and see how it changes.
Worksheets to use with this
DSCR worksheet (XLSX)
Work out your debt service coverage ratio step by step, with a filled-in example.
12-month cash flow projection (XLSX)
Map out cash coming in and going out each month and spot tight months before they hit.
Related tools
Estimates for education only. Not an offer of credit or a promise of approval. Actual terms depend on the lender and credit approval. Not affiliated with any employer. Read the full disclaimer.