Debt Service Coverage Ratio Calculator

A strong Debt Service Coverage Ratio (DSCR) is one of the most important financial metrics SBA lenders use when evaluating a loan request. Our SBA DSCR Calculator helps you estimate whether your business generates enough cash flow to comfortably cover its existing debt obligations plus a proposed SBA loan payment. By understanding your DSCR before applying, you can gauge your financing readiness and identify potential issues before entering underwriting.

Calculate SBA Debt Service Coverage Ratio (DSCR).

DSCR = Adjusted Operating Income ÷ Annual Debt Payments

Adjusted Operating Income =
Net Profit + Owner Salary + Interest + Depreciation + Amortization

Annual Debt Payments =
(Current Monthly Debt + New SBA Payment) × 12

Target DSCR for SBA approval is typically 1.25 or higher.

Why DSCR Matters

Read deeper into DSCR here.

Cash flow is often the single biggest factor in SBA underwriting. Even businesses with strong revenue can struggle to qualify if debt payments consume too much of their available income. Calculating your DSCR before applying can help you:

  • Estimate SBA eligibility
  • Determine an affordable loan payment
  • Identify opportunities to improve cash flow
  • Avoid applying for more financing than your business can support
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Net Operating Income (Adjusted)

From business tax return

$
$

Officer compensation from tax return.

$
$
$
Total Operating Income (Adjusted) $0
Total Annual Debt Servicing
$

Existing business debt payments per month.

$

Calculate your SBA payment →

Total Annual Debt Servicing $0
Debt-Service Coverage Ratio
— DSCR
Net Operating Income
$0
Annual Debt Servicing
$0
Monthly Debt Servicing
$0
—
Enter debt servicing

Enter your current and proposed monthly debt payments to calculate DSCR.

Estimates only. DSCR is one factor in SBA underwriting. Lenders also evaluate credit, collateral, industry risk, and global cash flow. A DSCR ≥ 1.25 is typical for SBA 7(a) approval but does not guarantee it. Consult your lender for a full underwriting analysis.