Use this calculator to estimate your debt service coverage with a new commercial loan. If your debt service coverage is greater than 1.25, including your new loan payment, you have a good chance of being approved.
- Loan amount
- Total amount of your loan.
- Payment period in years.
- Interest rate
- Annual interest rate for this loan. Interest is calculated monthly on the current outstanding balance of your loan at 1/12 of the annual rate.
- New monthly payment
- Monthly payment for this loan.
- Annual Verifiable net income
- Your annual net income from IRS tax returns or other financial statements.
- Annual depreciation expense
- Since depreciation reduces your net income, but not your cash flow, we add back depreciation in calculating your total net cash income.
- Other non-cash charges
- Like depreciation, these are other non-cash charges to your net income that should be added back to calculate your total net cash income for the year.
- Real estate mortgage
- Your monthly payment for any real estate mortgages.
- Business line of credit
- Your monthly payment for any business lines of credit.
- Auto loans
- Your monthly payment for any auto loans.
- Credit cards
- Your monthly payment for any credit cards.
- Other loans
- Your monthly payment for any other outstanding loans.
- Monthly debt payments eliminated
- Enter the amount, if any, of the monthly obligations you entered above that will be paid off by this new loan.
- Debt Service Coverage (DSC)
- The Debt Service Coverage (DSC) is determined by dividing the total annual net cash income by the total annual debt service. If you have a DSC of 1.25 or higher, there is a good chance that you will be approved for your loan.