Commercial Loan DSCR Calculator

Check if your business generates enough net operating income to service current and proposed loans. Enter NOI plus annual debt service for existing and new obligations to see combined DSCR, the NOI gap to your underwriting target, and the boost from any introductory interest-only period.

Use trailing-twelve-month NOI before debt service (after add-backs).
Annual principal and interest owed on current loans or leases.
Annualized principal and interest for the facility you are evaluating.
Leave blank to assume a 1.25× underwriting hurdle.
Model a temporary interest-only period to see first-year DSCR (0–12 months).

For underwriting guidance only—work with your lender to confirm final DSCR calculations.

Examples

  • NOI $180,000, existing debt $90,000, new debt $40,000 ⇒ DSCR 1.38×, minimum NOI $162,500, surplus $17,500
  • NOI $250,000, existing debt $120,000, new debt $105,000 ⇒ DSCR 1.11×, needs $31,250 additional NOI to hit a 1.25× target
  • NOI $220,000, existing debt $100,000, new debt $80,000 with 6-month interest-only ⇒ standard DSCR 1.22×, first-year DSCR 1.57×

FAQ

Should I include balloon payments in debt service?

Yes. If a balloon is due during the measurement period, amortize it over the remaining years or model a refinance to avoid overstating DSCR.

How does an interest-only period change DSCR?

During months when the new facility is interest-only, annualized debt service falls and DSCR temporarily increases. Once amortization begins, DSCR steps down toward the long-term ratio.

What NOI adjustments do lenders allow?

Underwriters commonly accept add-backs for one-time expenses, excess owner salary, or non-cash charges. Provide detailed documentation so the bank can normalize NOI confidently.

Can I test covenant headroom for existing loans?

Yes—enter your current NOI and debt service with the lender's required DSCR. The NOI gap shows how much performance can drop before you breach covenants.

Additional Information

  • Debt service coverage ratio (DSCR) equals NOI divided by total annual principal and interest payments.
  • Most SBA 7(a) lenders want 1.15×–1.25× DSCR; commercial real estate lenders often target 1.30× or higher for multi-tenant assets.
  • Add lease payments, equipment financing, and guaranteed debt when you calculate total debt service for a complete picture.
  • Normalize NOI by removing one-time expenses, owner add-backs, and non-cash charges so the ratio reflects sustainable cash flow.

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