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Debt service coverage ratio (DSCR) is net operating income divided by total yearly debt payments (existing loans plus the new payment you model). Lenders and SBA participating lenders review whether business cash flow can support proposed debt as part of underwriting — this calculator lets you test amounts, terms, and rates you enter; it is not an approval decision.
SBA participating lenders document ability to repay under agency policy (SBA SOP 50 10). The SBA 7(a) program overview describes lender underwriting.
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How lenders use cash flow
Underwriters compare operating cash to proposed debt service — often with adjustments for one-time expenses, owner compensation, and collateral. DSCR is one lens; time in business, credit, industry, and use of funds still matter.
For longer SBA terms and government forms, see our SBA loans overview. For conventional amortizing term debt, see business term loans.
FAQ
- What is debt service coverage ratio (DSCR)?
- DSCR compares cash available to cover debt payments — often net operating income divided by total yearly principal and interest on business loans. Lenders use it alongside the rest of your loan file to see whether projected cash flow can support the payment you are requesting.
- How do I estimate net operating income (NOI) for this calculator?
- Start from net income on your P&L, then add back non-cash charges such as interest, depreciation, and amortization — the same building blocks many owners use before debt service. Your CPA or bookkeeper can confirm the right figure for your entity.
- Does the SBA publish one DSCR number every lender must hit?
- No. SBA participating lenders underwrite each file and document repayment ability under SBA policy (SOP 50 10). There is no single minimum ratio in that guidance; each lender sets its own terms after review.
- Is this calculator an approval decision or a loan offer?
- No. It is an illustration using numbers you enter. Rates, amounts, and requirements are set by our trusted financing partner after a financing inquiry.