DSCR calculator for business loans and rental properties.
See your debt service coverage ratio, the number lenders use to decide if your income covers the payments, and the largest loan it supports. Change any number and the results update instantly.
Meets the 1.25x minimum.
At your rate and term. Approximate.
- Net operating income (yearly)
- $44,200
- New loan payments (yearly)
- $12,896
- All debt payments (yearly)
- $18,896
Estimates only; not financial, tax, legal or investment advice. Lenders calculate DSCR from your own documents and set their own minimums. We are a marketing and online-presence company, not a lender, broker or credit service.
What DSCR means, in one line.
Debt service coverage ratio = income available for debt ÷ debt payments. Above 1.0x, your income covers the payments. Below 1.0x, it doesn't, and most lenders decline.
Business loans
Yearly net operating income ÷ all yearly debt payments, new and existing. Example: $210,000 revenue, 32% direct costs and $98,600 of expenses leave $44,200. A $50,000 loan at 10.5% for 5 years plus $6,000 of existing payments costs $18,896 a year. DSCR = 2.34x.
Rental properties
Monthly rent ÷ monthly PITIA (principal, interest, taxes, insurance, HOA). Example: a $200,000 loan at 7.5% for 30 years is $1,398 a month. Add $250 of taxes and $100 of insurance and PITIA is $1,748. Rent of $2,200 gives a DSCR of 1.26x.
The ratio is only part of the file.
Lenders also read your business plan and look your company up. Our free Business Plan Kit has four AI prompts that write the plan sections lenders read first, plus the Excel version of this calculator with a 3-year projection. And if a search for your business turns up a Gmail address or nothing at all, our Verified Presence build fixes that in 10 business days.
Investing in real estate? See the kit for investors.
DSCR, answered.
What is a good DSCR?
Many banks look for a debt service coverage ratio of 1.25x or higher on business loans, meaning $1.25 of operating income for every $1.00 of debt payments. DSCR rental lenders often accept 1.0x to 1.25x, and some go lower with a higher rate or bigger down payment. Each lender sets its own minimum, so ask yours.
How do you calculate DSCR for a business?
Divide your yearly net operating income by your yearly debt payments. Net operating income is revenue minus direct costs and operating expenses, before loan payments. Debt payments include the new loan plus everything you already owe. A business with $44,200 of operating income and $18,896 of yearly payments has a DSCR of 2.34x.
How do you calculate DSCR for a rental property?
Divide the monthly rent by the monthly PITIA: principal, interest, property taxes, insurance and any HOA dues. A property renting for $2,200 with a $1,748 PITIA has a DSCR of 1.26x. Many DSCR lenders use the lease or an appraiser's market-rent estimate, not your personal income.
How can I raise my DSCR?
Borrow less, stretch the term, lower the rate, raise income or cut operating costs. For a rental, a larger down payment or higher rent moves the ratio fastest. For a business, paying off a small existing loan can free up more coverage than you expect, because every dollar of existing payments counts against you.
Is this calculator's result a loan approval?
No. It estimates the ratio lenders look at, using the numbers you enter. Lenders calculate DSCR from your tax returns, bank statements, leases and appraisals, and they weigh credit, collateral and experience too.