Test proposed debt
See the modeled DSCR for a desired loan alongside any existing annual debt service.
Debt coverage planning tool
SBA DSCR Calculator
Calculate the debt coverage on a proposed acquisition loan, then reverse-solve the maximum loan and purchase price supported by the business cash flow.
Forward and reverse solveResults firstLender assumptions vary
What DSCR tells you
How much room remains after debt service?
Debt service coverage ratio compares the cash flow available for debt with annual principal and interest payments. It is a planning signal, not a complete credit decision.
Reverse-solve capacity
Start with a target DSCR and calculate maximum new annual debt service and loan principal.
Estimate purchase price
Translate maximum modeled debt into a purchase price using selected equity and seller financing.
Methodology
How the DSCR model works.
The calculator amortizes the proposed loan, adds existing debt service, and divides annual cash flow by the total. The reverse model divides cash flow by the target DSCR and converts available annual debt service back into principal.
- Only use defensible cash flow and add-backs that a lender is likely to accept.
- The maximum loan output is capped at the standard $5 million SBA 7(a) maximum.
- Primary sources: SBA 7(a) loans and SBA SOP 50 10.
Reviewed by: Emporio Partners
This calculator is for planning only. It is not a loan approval, pre-approval, commitment to lend, or guarantee of financing. A lender determines eligible cash flow, accepted add-backs, required coverage, loan structure, and approval after full underwriting.
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