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Business Loan Eligibility (DSCR) Calculator
See your debt service coverage ratio, the EMI on a new loan and the largest loan your profits can support.
What DSCR means
The debt service coverage ratio compares the cash your business earns with the loan payments due in a year. It is profit after tax plus depreciation plus interest, divided by interest plus principal repayments.
What banks look for
Most lenders want a DSCR of at least 1.25, and many prefer 1.5 or more for term loans. Below 1, the business does not earn enough to repay from operations.
How to improve it
Choose a longer tenure to lower the yearly repayment, pay off costly short loans, or show higher projected profits backed by orders. A well-prepared CMA report presents these numbers the way banks read them.
Beyond DSCR
Banks also check collateral, your credit score, the current ratio, promoters’ contribution and the business plan. Use this result as a first check before you approach a lender.