2 min read
DSCR = net operating income ÷ total debt service. Lenders typically look for 1.25 or higher.
How to use it
Enter your figures above — the result updates instantly and nothing leaves your browser. Debt service coverage ratio (DSCR) calculator results are illustrative and not a quote or credit decision.
How to interpret the result
A DSCR above 1 means net operating income covers loan repayments with something left over; a ratio below 1 means income falls short and other resources would need to plug the gap. The further above 1 the figure sits, the more headroom a company has if income dips or costs rise unexpectedly during the year.
Lenders generally prefer to see comfortable headroom rather than a result that sits right at their minimum threshold, because it suggests repayments can be met even if trading conditions are tougher than expected. A single calculation is a snapshot rather than a forecast, so it's most useful read alongside how income and costs have moved over recent periods, not in isolation.
Limitations and good practice
This calculator works from the figures you enter, so the result is only as reliable as those inputs. Net operating income can vary between accounting periods, and 'annual loan repayments' should capture the true total debt service across all facilities, not just the loan being considered, otherwise the ratio will overstate how much headroom actually exists.
It's good practice to recalculate using a plausible lower-income scenario as well as your current figures, since this shows how resilient the ratio is to a slower trading period rather than just how it looks under normal conditions. As the page notes, the output here is illustrative only — treat it as a starting point for your own analysis, and see the loan affordability (debt service cover) calculator or wider business loans information for how the same idea applies to a specific facility.
Frequently asked questions
What DSCR do lenders want?
Many look for 1.25×, meaning income is 25% above repayments. Creditcorp assesses each company on its own merits.
Is this a quote?
No — it's a free illustration. Your actual Creditcorp offer depends on an assessment of your company.
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