Debt capacity (DSCR) calculator
Estimate how much debt a project or business can support at the coverage ratio lenders ask for. Useful as a first check before a financing conversation.
Enter the numbers on the left and press Calculate to see the result here.
How it works
Lenders want cash flow to cover loan payments with a cushion. The calculator works backwards from the cushion you choose.
Maximum annual debt service = Cash flow / Target DSCR
That payment is then turned into a loan size using a standard repayment calculation, based on your interest rate and term. If you enter your actual annual debt service, it also shows your current DSCR.
Worked example
A project earns 2,000,000 a year. At a target DSCR of 1.25x the most it can pay each year is 1,600,000. At 6.5% interest over 10 years, that payment supports a loan of about 11.5 million.
Important limitations: please read
Real lenders use their own criteria, covenants and risk appetite. This calculator assumes a level, fully repaying loan and a single steady cash flow figure, while real projects often have cash flow that changes from year to year. It is a rough first-pass estimate, not a loan offer, a term sheet or an indication of what any lender would approve.
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