Business Financing Tool
Business Loan Payment & DSCR Calculator
Estimate monthly and annual loan payments, test debt-service coverage and compare a proposed loan with the amount the business may support under selected cash-flow assumptions.
Understanding the result
A payment estimate is only the beginning.
The calculator estimates the monthly payment on the proposed loan, converts it to annual debt service and combines it with other annual debt obligations. It then compares that total with normalized cash flow after maintenance capital expenditures.
How DSCR is calculated
Debt-service coverage ratio is estimated as cash flow available for debt service divided by total annual debt service. A result above the selected target indicates a larger cash-flow cushion; a result below target suggests the proposed structure may require less debt, more equity, different terms or stronger sustainable cash flow.
Why a lender may calculate differently
- Reported EBITDA may be normalized differently.
- Owner compensation and replacement-management costs may be adjusted.
- Working-capital needs and taxes may reduce available cash.
- Existing leases, loans and guarantees may be included.
- Interest rates may be stressed above the proposed rate.
- Required DSCR and amortization vary by lender, industry and risk.
For acquisition-specific structuring, use the Business Acquisition Financing Calculator. For a deeper cash-flow discussion, read Normalizing EBITDA in an M&A Transaction.
Planning a business financing?
CFM can assess sustainable cash flow, the complete debt structure, lender fit and the financing strategy—not only the payment calculation.
Confidential inquiries welcome.