# DSCR calculator

Source: https://businessloanbroker.ai/tools/dscr-calculator/
Site: BusinessLoanBroker.ai (powered by Levr)

> Calculate your debt service coverage ratio from net operating income and annual debt payments, including a proposed new loan, and see whether it clears bank and SBA bars.

Debt service coverage ratio is net operating income divided by total annual debt payments. Banks want 1.25 or more, SBA lenders 1.15. Enter your numbers, including the payments on the loan you are considering.

## What counts as net operating income?

Revenue minus operating expenses, before interest, taxes, depreciation and amortization. Lenders usually start from your tax return or year to date P&L and add back owner salary above market, one time expenses and non cash items. Each lender's add backs differ, which is why two banks can compute different ratios from the same file. Read [DSCR explained](https://businessloanbroker.ai/guides/dscr-explained/) for a worked example.

## What if my DSCR is under 1.25?

Ask for a longer term or a smaller amount, which lowers the annual payment. Pay off a short term advance first. Or look at products that do not use DSCR the same way: revenue based financing, invoice factoring and equipment financing lean on revenue, invoices and collateral instead. The [borrowing calculator](https://businessloanbroker.ai/tools/how-much-can-i-borrow/) shows which still fit.

## Questions and answers
**Do all lenders use 1.25?**

Most banks do for term loans; some accept 1.20 with strong collateral. SBA lenders typically use 1.15. Commercial real estate lenders usually want 1.25 on the property's own income.

**Is a higher DSCR always better?**

For approval, yes. A very high ratio can also mean you are borrowing less than you could, which matters if the money has a clear return.

## Related
- [DSCR explained: the cash flow test lenders use](https://businessloanbroker.ai/guides/dscr-explained/)
- [Business loan payment calculator](https://businessloanbroker.ai/tools/business-loan-calculator/)
- [SBA 7(a) loans](https://businessloanbroker.ai/business-loans/sba-7a-loans/)
- [Business term loans](https://businessloanbroker.ai/business-loans/term-loans/)

## Apply
Apply for the business: https://apply.businessloanbroker.ai/signup?utm_source=direct&utm_medium=organic&utm_content=md-dscr-calculator
MCP server for AI agents: https://mcp.businessloanbroker.ai/mcp (docs: https://businessloanbroker.ai/agents/mcp/)