Debt Service Coverage Ratio Calculator (DSCR) Calculator

Calculate your Debt Service Coverage Ratio (DSCR) instantly using net operating income and debt service. Evaluate loan eligibility and cash flow strength.

DSCR Calculator

Evaluate Debt Service Coverage Ratio (NOI / Debt Service).

Choose the period for inputs. The ratio is unchanged if both inputs use the same basis.

$

Revenue minus operating expenses, before debt service and capital expenditures.

$

Total required loan payments over the chosen period (principal + interest).

Results

  • DSCR—
  • Coverage Category—
  • Cash Flow Margin$

Enter your inputs above to calculate the results.

Debt Service Coverage Ratio (DSCR) Calculator

Use this DSCR calculator to evaluate your business’s ability to meet debt obligations. Enter your Net Operating Income (NOI) and Debt Service to find your coverage ratio and interpret the result.

Formula

DSCR = Net Operating Income ÷ Total Debt Service

Item Plain meaning Example
Inputs (what you enter)
Gross Rent Total yearly rent at full occupancy 240,000
Other Income Parking, laundry, storage, etc. 12,000
Vacancy % Expected income lost to vacancy/non-pay 5
Operating Expenses Taxes, insurance, repairs, utilities (owner), mgmt 95,000
Reserves (optional) Annual allowance for future replacements 12,000
Loan Terms Loan amount, rate, years (used to get yearly payment) 1.50M, 7.25%, 30y
Target DSCR Lender minimum you aim to meet 1.25
Auto (calculator shows)
Effective Gross Income (EGI) (Rent + Other) × (1 − Vacancy%) 239,400
NOI EGI − (Operating Expenses + Reserves) 132,400
Annual Debt Service (ADS) Total yearly loan payments (principal + interest) 100,000
DSCR NOI ÷ ADS 1.32
Verdict (at a glance)
Status Pass if DSCR ≥ Target; Borderline if within 0.05; else Fail Pass (1.32 ≥ 1.25)
Max Loan (hint) Largest loan keeping DSCR at Target ≈ 1.38M

How to Use the Debt Service Coverage Ratio Calculator (DSCR) Calculator

Frequently Asked Questions

What does a DSCR calculator compute?

It computes the Debt Service Coverage Ratio and related metrics using plain-text formulas. DSCR = Net Operating Income divided by Debt Service. Cash flow margin = Net Operating Income minus Debt Service.

How do I calculate DSCR with annual or monthly inputs?

Keep both inputs on the same time basis. Example (annual): Net Operating Income 42 and Debt Service 24 → DSCR = 42 / 24 = 1.75; cash flow margin = 42 − 24 = 18. The same arithmetic applies if both are monthly.

What counts as “Debt Service” and “Net Operating Income” here?

Debt Service is the required principal plus interest due for the period. Net Operating Income is operating cash flow available to pay debt after operating expenses (for small-business lending this often aligns with EBITDA adjusted per lender guidance). Project-finance variants use “cash flow available for debt service” but the ratio structure is the same (cash flow over principal+interest).

What DSCR is considered acceptable?

Many lenders look for DSCR ≥ 1.20–1.25. U.S. SBA 7(a) policy explicitly requires at least 1.15 based on operating cash flow over debt service, with 1:1 on a global basis. Higher ratios indicate more cushion.

How does the calculator round and display results?

Results are computed exactly from your inputs and then rounded to two decimals using round-half-even (bankers’ rounding). Currency labels use ISO 4217 three-letter codes (e.g., USD, EUR).

The calculator performs direct arithmetic with consistent periods: DSCR = Net Operating Income / Debt Service; Cash Flow Margin = Net Operating Income − Debt Service. “Debt Service” includes scheduled principal plus interest for the chosen period; “income” is operating cash flow available to service debt. For project-finance contexts the same structure applies with CFADS in the numerator. Results are rounded to two decimals using the NIST-recommended round-half-even rule; numbers are shown with SI-style formatting and currency codes per ISO 4217. Inputs must share the same time basis (monthly or annual). Edge cases: if Debt Service ≤ 0, DSCR is not reported; negative income yields DSCR < 0 and the margin equals income minus debt service. Category labels (e.g., ≥1.50 “very strong”) are interpretive and not a formal standard; minimums referenced (e.g., SBA 1.15) follow the cited policy.

Sources & Methodology