Debt Service Coverage Ratio (DSCR) Calculator
Calculate your DSCR to determine if a business can support its debt obligations. SBA lenders in 2026 typically require a minimum DSCR of 1.25x. Enter your net operating income and annual debt service to get an instant assessment.
Business Income
Subtracted from SDE to estimate NOI for DSCR
Debt Service
Include all debt payments (SBA loan + seller notes + other)
Quick Tips
- •SBA lenders require minimum 1.25x DSCR
- •DSCR = Net Operating Income / Total Debt Service
- •Higher DSCR means more cushion for debt payments
- •Include all debt payments (SBA + seller notes)
- •Use SDE or NOI depending on the lender's method
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Enter the business's annual net operating income (or SDE for owner operated businesses) and the total annual debt service, which includes all loan payments the new owner would have after closing. The result shows whether the business cash flow covers its debt obligations at the SBA minimum 1.25x threshold. Run this before submitting an SBA application to identify deals that may require a larger down payment or different structure.
Frequently Asked Questions
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