Klarefi

DSCR calculator

The debt service coverage ratio is the cash a business makes in a year, divided by everything it pays on its debt in that year. Work it out for a new loan, with annuity or linear repayment, and see the largest loan that meets your target.

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Usually EBITDA from the latest accounts

Interest and repayments on other loans and leases

What they ask for

Per year

In months

Your own credit policy, such as 1.25

Repayment

How the loan is paid back

Enter the cash flow and a loan, or fill in the example, to see the DSCR.

The ratio is arithmetic. What the numbers behind it really are, taken from the accounts and the bank statements with the line each one came from, is where Klarefi comes in. Whether the ratio is good enough stays your call.

Build your loan application

How the DSCR is worked out.

  1. Start from the cash flow

    Take what the business makes in a year before interest, tax and depreciation. Most lenders start from EBITDA in the latest accounts and take out one-off items.

  2. Add up a year of debt payments

    Interest and repayments on every existing loan and lease, plus the first twelve months of the new loan.

  3. Divide the one by the other

    A DSCR of 1.25 means the business makes 25% more cash than its payments need. Below 1, the payments are more than the cash.

  4. Work back to the largest loan

    Payments grow in step with the amount, so at the same rate and term the calculator finds the largest loan that still meets your target.

What the ratio leaves out.

  • Whether the EBITDA in the accounts is the real number, or still holds one-off income.
  • Loan payments that show on the bank statements but not on the list the applicant gave you.
  • How seasonal the cash flow is, and whether the bank statements back it up.
  • Whether the accounts are recent enough to rely on.

Those take reading the accounts and the bank statements side by side. That is the work Klarefi does during the application, with every number linked to the line it came from.

A case file ready for your credit team.

The form says turnover was 2.4 million. The annual accounts say 2.18 million. Klarefi reads the application, the accounts and the bank statements together, asks the applicant about the difference while they are still applying, and adds the answer to the file.

Build your loan application

Free to start. Data stored in the EU by default.

  1. Send applicants one link

    They upload the accounts, the bank statements and the rest of your list, from any device.

  2. Klarefi checks each application

    It reads every document, compares the numbers, and asks the applicant in a chat for anything missing or unclear.

  3. Your credit team reviews one file

    Every number links to the line it came from. Anything still open stays visible for review.