Borrowing Capacity Calculator
Work out how much debt your business can afford to service.
Results
Maximum monthly payment on a new loan
The highest monthly payment on a new loan at which DSCR stays at the required level. —
Maximum loan amount
The largest new loan at the specified rate and term (with annuity repayment). —
Banks also assess collateral, credit history, business track record and other factors.
Glossary of terms
- Average monthly operating cash flow
- Cash received from core operations in a month minus operating payments (salaries, rent, suppliers, taxes), before loan repayments. This is the amount the business can use to service debt.
- Existing monthly loan payments
- The amount payable each month on loans and leases you already have (principal + interest).
- Annual interest rate
- The expected annual interest rate on the new loan.
- Loan term
- The repayment period, in months. The longer the term, the larger the loan you can take with the same payment — but total interest increases.
- Debt service coverage ratio (DSCR)
- Operating cash flow divided by monthly loan payments. Shows how many times the business's cash flow covers its loan payments. A value below 1 means cash flow does not cover the payments.
- Required DSCR
- The minimum ratio the bank requires. Most banks expect at least 1.2–1.3.
- Maximum monthly payment on a new loan
- The highest monthly payment on a new loan at which DSCR stays at the required level.
- Maximum loan amount
- The largest new loan at the specified rate and term (with annuity repayment).
- Desired loan amount
- The loan you plan to take — check how well it meets the bank's requirements.
Results are indicative and do not constitute financial advice.