Learning Center: Debt-Service Coverage Calculator

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Debt-Service Coverage Calculator

When selecting a funding method, you need to be sure that the business can cover any debt it takes on. Lenders use what’s called a ‘debt-service coverage ratio’ to determine if a business has the ability to successfully repay a loan, and our debt-service calculator allows you to determine this number on your own before applying for a loan.

This calculator looks at a business’s past revenue and operating expenses to determine how a monthly loan payment would affect net profit, and then calculates the debt-service coverage ratio based on those numbers. Coverage ratio scores range from 1 – 4; the higher the score, the better the business’s ability to afford the debt.

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