Debt service cover ratio (DSCR) calculator

Earnings before interest, tax, depreciation and amortisation: roughly your operating profit with depreciation added back. Lenders often adjust it for one-off items and directors’ pay.

You may still have options: a longer term, a smaller amount, asset-backed or invoice finance, or showing that profits are rising. Tell us your figures and we’ll say honestly what’s realistic.

Usually both: filed accounts for history and recent management accounts for current trading.

Start with your latest full-year accounts: operating profit with depreciation and amortisation added back. If trading has changed since, run it again with a recent twelve-month figure from management accounts. Lenders usually look at both, and may adjust for one-off items, so using a cautious figure gives a more realistic ratio.

Many lenders look for at least about 1.25×, meaning profits are 25% higher than total loan repayments, and prefer more for seasonal or cyclical businesses. A ratio around 1.5× or above usually gives more comfortable headroom. Requirements vary between lenders and products, and the ratio is weighed alongside your accounts, credit history and security.

Interest cover compares profit with interest only. DSCR compares profit with all loan repayments, capital as well as interest, so it is the stricter test for a loan that repays capital monthly. Some lenders look at both, and interest cover is often used for facilities where capital is repaid at the end.

You can raise the profit side or reduce annual repayments. Refinancing short, expensive debt over a longer term, borrowing a smaller amount, or showing sustained profit growth in management accounts can all help. Asset finance or invoice finance may also be assessed differently, as the asset or invoices support the lending.