DSCR Calculator | Mehmi Financial Group

Debt Service Coverage Ratio Calculator

Calculate your DSCR to understand your business's ability to cover debt payments and qualify for financing.

What is DSCR?

Debt Service Coverage Ratio measures your business's ability to pay debt obligations with operating income. Lenders use DSCR to assess loan risk — a ratio of 1.25x or higher typically indicates strong repayment capacity.

Your Debt Service Coverage Ratio
0.00x
Enter your financials

DSCR Analysis

Net Operating Income$180,000
Total Annual Debt Service$84,000
Cash After Debt Service$96,000
DSCR Ratio2.14x

Business Metrics

30%
Operating Margin
14%
Debt/Revenue
$7,000
Monthly Debt
$8,000
Monthly Cushion

DSCR is calculated by dividing your Net Operating Income by your Total Debt Service:

DSCR = Net Operating Income ÷ Total Annual Debt Payments

Your NOI
$180,000
÷ Debt Service
$84,000

Lenders evaluate DSCR on a scale to determine loan eligibility and terms:

1.25x+
Strong
1.0-1.24x
Marginal
<1.0x
Weak

Net Operating Income (NOI) is your gross revenue minus operating expenses, before interest and taxes.

NOI = Revenue - Operating Expenses (excluding interest, depreciation, and taxes)

This represents the cash available to service debt and is the key metric lenders evaluate.

*All amounts in Canadian dollars. Estimates only—this is not a financing offer or approval. Taxes (GST/PST/HST) NOT included.

Use this calculator to estimate your debt service coverage ratio and understand how lenders view repayment capacity. Enter net operating income, existing debt payments, and proposed new debt to see your ratio, cash cushion, and a simple strength rating.

What you can do on this page

  • Calculate debt service coverage ratio from operating income and total debt payments
  • See cash remaining after debt service and monthly cushion
  • Estimate the maximum loan amount based on a target debt service coverage ratio

FAQs

Everything you need to know about how this calculator works, what the results mean, and what is included. If you need a quote or help reviewing your numbers, feel free to contact our credit analysts.
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What does debt service coverage ratio mean?
It measures how much operating income you have relative to your annual debt payments.
How do you calculate debt service coverage ratio?
Debt service coverage ratio equals net operating income divided by total annual debt payments.
What is a “good” debt service coverage ratio?
Many lenders prefer 1.25 times or higher, but requirements vary by lender, industry, and collateral.
What counts as “debt payments” in this calculator?
Your existing annual debt payments plus the proposed new annual payments you enter.
Is net operating income the same as profit?
Not always. Net operating income is typically operating income before interest and taxes. Your accounting may label it differently.
Can I qualify with a ratio below 1.25 times?
Sometimes, but it often requires stronger collateral, a stronger guarantor, lower loan amount, or a different structure.

Disclaimer:
This Truck & Heavy Equipment Financing Calculator is provided for informational purposes only. It offers estimates based on the information provided and current average rates, which may vary depending on individual creditworthiness, lender policies, market conditions, and other factors. This calculator does not constitute a loan offer, lease offer, or approval from Mehmi Financial Group or its affiliates. Please contact Mehmi Financial Group directly to confirm current rates, terms, and actual financing availability. Mehmi Financial Group accepts no liability for decisions made using this calculator.

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